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CR News Reports© - Real EstateReal Estate -February 17, 2015

How we get these Future News Predictions

Find out how these predictions will affect you

  • Real estate stressors

  • Mortgage interest deduction
  • Going up in price and appreciate
  • Can you deduct this loss from your taxes…
  • What’s wrong with this picture
  • It’s a whole new scheme…

We are going to discuss the real estate stressors. When you look at it closely, real estate is not an investment at all. While it may have been in previous decades when the value doubled about every ten years, much has changed.

People said they owned real estate instead of renting because of the mortgage interest deduction on their taxes. Well, that could disappear in an instant. Mortgages last 20 or 30 years and during that time it’s highly likely that the tax laws will change many times – and not in your favor.

People bought real estate in order to see it going up in price and appreciate. That’s not happening, so now people are lucky if they don’t lose any money on their investment; many have lost half or more.

Can you deduct this loss from your taxes?…no. You could if you owned stocks and took a loss, but not real estate. What if you somehow got lucky and bought low and sold high – when the price went up would you owe taxes on the gain?…yes you would. And the amount of taxes can change each time the tax laws change. This seems to be a huge negative incentive to own real estate. If you lose money you can’t claim a deduction, if you make money you have to pay taxes.

This is on top of all maintenance costs that keep going up, insurance costs that keep going up, and things like homeowners dues, special assessments, and utilities. People who installed solar on the real estate thought they could save money but now they are being changed by the electric companies a monthly fee for not using enough electricity. You have to pay for something you didn’t buy. What’s wrong with this picture is everything!

It isn’t your parents, or grandparents real estate market. It’s a whole new scheme to take your money.

QUESTION: What should readers take away from this message today?

ANSWER: That it’s probably not going to be a good idea to buy real estate unless things change radically.

QUESTION: Why is this information timely?

ANSWER: This information is timely because if you were thinking about buying real estate or building, maybe you should consider rental apartments.

QUESTION: How can readers best apply this information to their lives right now?

ANSWER: Think twice when someone tells you about the joys of home ownership because it is them who probably stands to profit from your investment burden.

COMMENTARY: The real benefit of owning real estate is that it gives you control over your living arrangement. You don’t have a landlord telling you how to live or evicting you when they choose to. It’s a security thing, but not if you can’t afford it. How do you know if you are one of the few who can really afford to own real estate? If you think that you can afford it just because you were granted a mortgage you are wrong. In fact, if you get a mortgage and then your income changes, you most likely won’t be able to afford it. This is just one of the real estate stressors that reveal you have over-extended yourself.

 

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