It can be a real eye opener to see how different real estate markets function.
Being the most liquid & largest, US is a great yardstick for other countries.
However, it’s characteristics aren’t always positive.
Lending is very aggressive compared to other jurisdictions.
Being the most liquid & largest, US is a great yardstick for other countries.
However, it’s characteristics aren’t always positive.
Lending is very aggressive compared to other jurisdictions.
US RE investors are used to:
• interest only loans (never pays down the principal of the loan)
• cash refinance (most countries won’t give cash out of the property like an ATM after 2008)
• aggressive loan book growth by local banks (as if they don’t remember the 2008 GFC)
• interest only loans (never pays down the principal of the loan)
• cash refinance (most countries won’t give cash out of the property like an ATM after 2008)
• aggressive loan book growth by local banks (as if they don’t remember the 2008 GFC)
However, there are also wonderful tax advantages & benefits, which rest of us can only dream of having:
• endless deferral of capital gain tax liability via 1031
• depreciation of income to further reduce taxation
• opportunity zones which have incredible tax advantages
• endless deferral of capital gain tax liability via 1031
• depreciation of income to further reduce taxation
• opportunity zones which have incredible tax advantages
On one side, some real estate investors get themselves in trouble at the end of every cycle with over leveraging, refinancing & financial engineering (creative deal structures).
On the other hand, long term strong hands, benefit from buying right, getting tax benefits & holding.
On the other hand, long term strong hands, benefit from buying right, getting tax benefits & holding.
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