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3 Considerations for Real Estate Investors in 2017

Posted on: March 10, 2017

2017 is well underway and a new White House administration is in place, however many real estate investors still have a great deal of uncertainty regarding what they can expect this year.

Several anticipated financial events and potential regulatory changes may have a dramatic effect on the real estate industry in every state.

Below are 3 potential events for 2017 that real estate investors should be aware of, and if you have any specific concerns it is recommended to meet with a South Florida commercial real estate attorney for guidance.

Rising interest rates

The Federal Reserve is expected to increase interest rates multiples times during 2017 among indications that the economy has stabilized and recovered from the Great Recession.

Last December, the Fed raised interest rates for just the second time since 2006. Around this time, the Fed also predicted that it would increase interest rates at least three times during 2017, which would represent the greatest number of increases in several years.

It is difficult to determine how rising interest rates will affect the real estate industry. Rising rates signify that the economy is healthy, and as a result incomes typically rise which can offset the increase in the mortgage payment. It is also possible that many potential buyers may make a surge to secure a low interest rate mortgage before rates start to rise.

Taxes may be lowered for commercial real estate investors

The Trump administration has promised to lower taxes for all Americans including real estate investors. Although it still remains unclear as to how Trump’s tax policies will be executed, many investors are anticipating a number of tax breaks which may help to stimulate commercial real estate investment. More specifically, investors are hoping for faster depreciation schedules for commercial real estate in order for tax deductions to be available more quickly.

Dodd-Frank may be dismantled in part or fully

Dodd-Frank is a regulatory bill that was passed in the wake of the 2008 financial collapse for the purpose of preventing excessive risk taking by financial institutions. President Trump has already signed executive orders repealing some Dodd-Frank regulations governing the oil and mining industry, and he has vowed to dismantle other parts of this bill.

The elimination of these regulations may give banks the freedom to offer mortgages to consumers with above average or high credit risk levels, similar to what occurred prior to 2008. Although this type of regulatory change would be controversial, it would likely result in a rapid rise in residential real estate sales in several regions.

Contact Mark Schecter for advice on your situation

If you are planning on making one or more property acquisitions in 2017, you likely have several concerns as the year moves forward. Mark Schecter at Schecter Law has worked for many years as a commercial real estate lawyer in the South Florida market and can help you plan your investment and minimize your risk.

Call Schecter Law today at (954) 779-7009 for advice on real estate investments in South Florida.