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In January when I did the annual State of the Union address, Peter Fortunato said the biggest threat to real estate investors is increased taxes and insurance costs.
He’s right!
Many city’s and states are flat broke, as is the federal government.
They see you and your real estate portfolio as a way to make more money. So, taxes will go up… again.
In some areas, investors have free and clear houses that will NOT cash flow because taxes and insurance is so high.
Doug Casey recently wrote, ” First, it’s very hard to be an investor in a highly politicized environment. Investors need to look for real, productive wealth and consistent growth. Speculators, on the other hand, try to capitalize on the chaos that is caused by the myriad of destructive government regulations, taxes, and, of course, currency inflation. That’s why I look at all markets, in all countries. But right now there are very few bargains. At some point, for instance, real estate is going to be of interest again. Not right now because governments everywhere are going to raise taxes on it.”
With higher Federal taxes in the way in 2013 ( conference call September 4th to discuss) plus higher property taxes, it makes you wonder if a buy/hold strategy is still valid or if a master lease strategy would be better.
Throw some inflation in the mix to make it worse.
What do you think? How are you preparing for the big changes in 2013?
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