With the election only a few weeks away, Moshe discusses the effects both presidential candidates would have on the real estate market, and how that could directly impact you as a buyer or seller.
Real estate during the Trump administration:
“During Trump’s administration they passed a law called ‘Furniture and Fixtures’ which was usually on a five-year schedule but now it’s on a one-year schedule. And even if I bought the property on December 31st of that year, I could take the whole 20%. So, if you bought something for a million dollars, you could take $200,000 on your tax return for that year, which will negate the entire year’s income. So, it was a great benefit. And even if you don’t use those losses, they carry forward for 15 years. So, it’s less money going to Uncle Sam and you’re keeping that money.”
Real estate during a potential Harris administration:
“When I think of Kamala Harris as far as real estate, I compare her to kind of similar to the way Joe Biden has it as president. So, I think that maybe they are similar. But I did see an article a couple of days ago where she did say she would increase the capital gains tax to 28%. We’re at about 20% now … so, again, from a real estate perspective, let’s say you’re selling, now you have to pay an extra eight percent.”
Estate tax and planning ahead:
“You should always think about this (I know it’s a morbid topic) but, estate tax. You’ve worked your whole life and you’re paying taxes in any which way that you are, like property tax every year, capital gains tax, and more. And all of a sudden, you have the people you love and care about and they’re in your will, and you want to give them assets or whatever you have in your estate. Well, it’s a 40% tax. So, just, as far as practical advice, have a will, have a power of attorney, and there are basic trusts, like pour over trusts and those kinds of things. … So, sit with your attorney. It’s smart because there are legal loopholes, and you can do structuring because you have control. And keep everything within your family.”
The first-time homebuyer’s credit:
“Let’s say one million people are getting this 25-grand (first time homebuyer’s) grant. There are different programs locally throughout the country; I know we have one in Dade County. Will it really move the ticker? I think it’s more political. It (just) sounds good.”
Why he is bullish on investing in office space:
“Real estate is very local. It’s a very contrarian view, but in the past year I’ve invested a lot and have been buying more office buildings, especially here in South Florida. A stat just came out last week that South Florida is the number one back-to-office state in the entire country. Florida is at a little over 91%, compared to 2019. So, just math-wise, if you’re at 91% back to office and you’re able to buy, from what it was a couple of years ago, 50 cents on the dollar! … And I’m seeing, just in all my other assets, that (this year) is the busiest leasing that I’ve ever had.”
Which of his verticals causes him the most headaches:
“I would say it’s definitely assisted living. I believed, when I first got into assisted living, that it was just real estate. But it’s the same thing with hotels. Yes, it’s real estate facets but it’s also day-to-day business. And that’s because you have to care for the seniors. … The residents need their medication, and they need three meals a day, and they need their activities. There are a lot of things, every single day. It’s a lot more labor intensive.”