Why Joe Biden’s Infrastructure Plan Can Be Beneficial For Real Estate Investors

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Why Joe Biden's Infrastructure Plan Can Be Beneficial For Real Estate Investors

Why Joe Biden’s Infrastructure Plan Can Be Beneficial For Real Estate Investors

One of the top priorities for the Biden administration is to get a clear version of the president’s $ 2.3 trillion infrastructure plan through Congress. This would be a great achievement for the president, but it could be an even bigger victory for the country’s real estate investors.

If infrastructure spending is music to the ears of investors, then the $ 2 trillion would be symphonic.

The plan is currently a few miles from the finish line, and a recently released Republican counter-proposal would greatly diminish its impact.

But a deal that leaves behind even a fraction of the current infrastructure plan could mean a boom in property prices – and big bucks for real estate investors

What’s in Biden’s Infrastructure Proposal?

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The largest item on Biden’s infrastructure bill is $ 621 billion, which he wants to spend on improving roads, bridges and various forms of public transportation.

Improving roads and bridges would give companies better access to consumers. This could lead to new businesses and new jobs in certain parts of the country, which could spur demand for housing. New public transport options often have the same effect.

Biden’s proposal also provides $ 213 billion for the construction, renovation and refurbishment of 2 million homes and housing units, with the refurbishment paid for through grant programs. The president is also pushing for the passage of the Residential Home Investment Act, which would provide developers and investors with $ 20 billion in tax breaks to build or renovate some 500,000 owner-occupied homes.

Corey Burr of TTR Sotheby’s International Realty Says Biden’s Plan Will Benefit Anyone Who Wants make money by investing in real estate “If the program is really aimed at worthwhile improvements to airports, roads, bridges, railways, pipelines, water security, power grids and the Internet.

“All of this actual investment in infrastructure will improve the quality of life in America and, as a result, make real estate more valuable.”

How infrastructure spending helps investors

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When they say that real estate is all about “location, location, location”, it is not just a reference to the amenities that real estate is approaching today, but also to what it may be close to in the future – a new highway, a new railroad. station, new campus. The evolution of a neighborhood or an entire small town sometimes requires infrastructure costs to get things going.

And it’s not just that new parks, schools or metro stations attract tenants who are willing to pay higher rents. Infrastructure costs are enormous for commercial real estate too.

A joint study by the Urban Land Institute and EY found that traditional infrastructure spending related to utilities, transportation and telecommunications is the most important factor when it comes to impacting commercial real estate and development decisions.

Any increase in commercial real estate activity caused by infrastructure spending will also help residential property investors… The same heightened economic activity that boosts demand for commercial property should lead to job growth, which often pushes both housing demand and rental prices in the right direction.

“Investing in America’s real infrastructure should be welcomed by all property owners and investors,” Burr says.

Will assassination kill Congress?

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To pay for all of this infrastructure investment, Biden proposed bringing the maximum individual tax rate back to 39.6%, raising the income tax rate from 21% to 28%, and almost doubling the capital gains tax rate from 20% to 39.6%.

These moves will ultimately generate over $ 1 trillion in revenue, but they are sure to be extremely unpopular with the country’s richest citizens.

They won’t be too attractive to Congress either. Biden has had enough trouble getting the COVID-19 relief bill approved. Convincing the House and Senate to approve an additional $ 2.3 trillion in infrastructure spending may take no less than a miracle.

Sensing a dangerous path ahead, the president previously said he was ready to accept $ 1.7 trillion in infrastructure funding. He then said he would consider signing the $ 1 trillion infrastructure bill.

Senate Republicans recently proposed a $ 928 billion counter offer, more than $ 70 billion less than Biden’s minimum. There may be a long way to go before anyone, whether investors or anyone else, benefits from this particular bill.

Build your financial infrastructure

While Washington is developing a solution for the country’s infrastructure, why not spend some time optimizing its investment strategy.

  • Find new approaches to real estate… If you want to take part in the country’s booming real estate market but are unable to buy any investment property of your own, you can make a real profit by investing in a real estate investment fund. Getting a piece dozens of luxury properties costs only $ 500.

  • Diversify your portfolio with cash balances… Historically, it has been difficult to outperform the stock market for sustained long-term growth. And with the smartphone app, you can invest “small change” from everyday purchases into a diversified portfolio.

  • Come back to earth… Meanwhile, some apps even allow accredited investors invest in U.S. farmlandwhich, according to industry research, has performed even better than the stock market over the past 30 years.

  • Don’t forget the refi… If you’re an investor and haven’t refinanced your home mortgages, you can leave a ton of money on the table. Now that mortgage rates have dropped below 3% again, mortgage data and technology provider Black Knight says 14.1 million homeowners can save $ 287 on average month with refi.

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