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5 at 5: Your Daily Digest for Real Estate Investing, 5/11/21

Millionacres logo Millionacres 5/11/2021 Marc Rapport
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Time to learn about inflation again, Biden tax plan and apartment investing, apartment rents rising but not as fast as house prices, a look at Elon Musk's latest "Boring" plan.

In Today's News

As Inflation Looms, Real Estate Heads into Long-Forgotten Territory

The last time anyone in real estate had to think too hard about inflation, Bisnow says, the iPhone was a new invention that only a few people owned, George W. Bush was still president, and the Kardashian family were only known for dad Robert's involvement in the O.J. Simpson trial.

The Millionacres takeaway: This thoughtful piece is a good primer on what the effects can be from what many predict is coming our way as the economy roars back from the pandemic. Apply it to your own situation as your own judgement dictates.

Biden Tax Proposal Would Squeeze Apartment Building Owners

The Biden administration's plan to limit a long-standing property-tax break could disrupt the business of investing in apartment buildings, discouraging both amateur and professional investors who helped fuel record multifamily sales, The Wall Street Journal reports today [subscription required].

The Millionacres takeaway: The tax break at question here is the 1031 exchange. Anything that discourages -- or just lessens the incentive -- to invest in renovating old places into new housing inventory is only going to exacerbate the supply shortage and affordability issues.

Apartment Rents Rose Last Month at Fastest Pace Seen in a Decade reports this week that U.S. apartment rent growth is back in a big way, now that the country's reopening local economies are fueling household creation and stimulating robust demand for all types of housing.

The Millionacres takeaway: On the other hand, being able to charge more for your investment in multifamily residential real estate may be just the thing to counteract a diminished tax break.

Today on Millionacres

NAR Reports Rocketing Residential Real Estate Prices

The National Association of Realtors released its quarterly median prices report today. Records are being set, and the rally is broad and deep, sending prices skyward and now reaching pretty much every market of any size in the country.

The Millionacres takeaway: A mixed bag here. Rising prices cut the margin for flippers and rental investors, but there also are more areas that are showing promise as a place to give it a go.

Elon Musk Excites the Opposition With His 'Boring' Florida Plan

If you were looking for a project that would create the smallest stir ever, you would probably call in a place called The Boring Company to manage it. Well, you would unless that company happened to be privately owned by Elon Musk and was attempting to open a huge can of worms underneath Fort Lauderdale, Florida.

The Millionacres takeaway: Our Kristi Waterworth compares the plan for a two-mile underground tunnel to the beach with a similar Musk project nearly complete in Las Vegas. One big difference: sinkholes. There also are real estate ramifications on the surface, too.

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