Real estate continues to defy expectations. Prices and sales just seem to keep going up. Perhaps not so much in spite of this year’s events, but because of them as well. A variety of new initiatives could also spur more action in leasing and home buying. That’s great news for investors.
Here’s what’s happening, and what the alternative looks like if these programs don’t work out as planned.
Yelp Helping To Re-Empty the Nest
Online review website Yelp is running a new initiative to give younger generations $2,000 to move back out of their parents house. With 52% of 18 to 29 year olds in America living back at home with their parents there are certainly plenty who could benefit from it. This is no doubt a marketing ploy to help boost Yelp’s contractor and service customers who offer moving related products and services. Yet, that $2k could really help many get back into an apartment of their own. In some cases it could be the difference of buying a home of their own. We could currently have double the households out there based on this data. If the inventory was there, these young adults could certainly add a lot of juice to the economy by moving out of the nest again.
Guaranteed Income Programs
Across the country and world, the COVID pandemic has given new birth to guaranteed universal income programs. The unemployed have already been enjoying more than they used to make working jobs thanks to recent stimulus deals. Now these guaranteed income programs could extend that stimulus. Even if it is just an extra $500 per month, that can help many rent a more expensive apartment or afford a bigger mortgage. While these programs are certainly controversial and not everyone is a fan, landlords can gain more confidence from knowing their residents have a guaranteed income coming in every month. Those issuing these checks are carefully monitoring every penny being spent by recipients and are collecting massive new data sets that give them a whole new level of insight into users. This data alone could be worth the expense for many organizations.
Get Paid To Vacation
Recent disruptions to the tourism and travel industry are sure to spawn more programs aimed at attracting tourists again. One Arizona senator introduced a bill that would give Americans a $4,000 tax credit for going on vacation. That would be double for joint filers, and an extra $500 for dependent children. That’s a $10,000 tax break for a family of four to take a vacation. Even if this bill or a version of it doesn’t pass at a federal level, expect many states and cities to eventually roll out their own. Many are desperate for tourist dollars to revive their jobs and economies. This spending won’t just benefit big airlines either. It also helps real estate tenants and owners of all types from hotels to Airbnb vacation apartments and homes to local restaurants. Travel also often leads people to discover new places where they want to stay and set up business.
Tax Differences
Taxes are headed in very different directions in different states, no matter the outcome of this election. Some are piling on recent costs associated with COVID, civil unrest and loss of revenues to property owners new annual tax bills. Others are freezing or reducing property taxes. You can imagine there may be some significant migration involved based upon where the taxes are skyrocketing and where they are going down.
What if All of this Stimulus Fails?
If people don’t seize on these programs or they are cut off after trial runs, investors are still in a great position. Inventory is already tight, and prices are competitive. If no one leaves the nest then multi-generational households may need to find larger homes and apartments to share. If foreclosures continue, those owners become renters and heat up the leasing game for landlords. People will continue to downsize or find more space cheaper. While others are also finding it the perfect time to upgrade and buy given low interest rates
Investment Opportunities
Find out more about investing in secured debt and real estate, go to NNG Capital Fund