Real Estate Investing Under Trump 2.0: What to Expect and How to Prepare
Now that the 2024 election is behind us, it’s time to think about how things might shift in the real estate market. As someone who’s been through my share of political and economic changes in this business, I can tell you this: being ready for change and having a solid plan in place is everything.
So, what might we see in the coming years? And how can we prepare for it?
More Cash in People’s Pockets Could Heat Up the Market
One big change we could see is the extension of personal tax cuts from the 2017 tax law, along with possible increases in federal spending.
What does this mean for real estate? Well, if people have more money to spend, it could increase the demand for homes and rentals. More people buying or renting means more competition, and that could push prices up—making it harder to find the kinds of deals we like to snag.
How to Prepare:
- Focus on properties that bring in strong cash flow. Even if the price tag is a little higher upfront, reliable income can help you ride out any market ups and downs.
- Watch those interest rates. If inflation goes up, the Fed may raise rates, and that could make borrowing more expensive. Make sure your deals still make sense if rates climb.
The Housing Shortage Isn’t Going Anywhere
There’s a chance the new administration might tighten immigration policies, which could make you think that housing demand might drop. But here’s the reality: we’re already facing a housing shortage. There are millions of units missing, and with population growth, rising costs, plus a slew of other factors, demand isn’t going to slow down any time soon.
For investors, this means rising rents and a need for more affordable housing.
How to Prepare:
- Look into rental properties. As it gets harder for people to buy homes, more will be looking for rentals.
- Think about workforce housing. Providing good-quality, affordable rentals for middle- and lower-income families tends to be a steady investment.
- Know your local market. Housing trends vary from place to place, so make sure you’re up to speed on how any new policies might impact your area.
Tariffs and Trade: Higher Construction Costs
The administration might revisit trade policies, which could mean tariffs on countries like China, Canada, and the EU. If that happens, construction materials might get more expensive, which could drive up the costs of new projects or renovations.
What does this mean for you? Well, new builds could become less attractive, while existing properties may become more valuable.
How to Prepare:
- Be prepared for higher renovation or construction costs. It’s always better to plan ahead than be caught off guard.
- Consider properties that don’t need major renovations. These might give you more bang for your buck in a market with higher construction costs.
Looking Ahead: Modest Economic Growth by 2026
Here’s some good news: economists are predicting steady, modest growth through 2026. While new policies might take a bit of time to show their impact, a growing economy often leads to more opportunities for investors. And a stronger economy generally means more confidence from consumers—which is great news for real estate.
How to Prepare:
- Keep an eye on market trends and the broader economy. Adjust your strategy to match what’s happening in the world around you, and you’ll be ahead of the game.
- Think long-term. It’s tempting to chase quick wins, but focusing on investments that will stand the test of time will pay off in the long run.
Final Thoughts: Flexibility is Key
One thing’s for sure: change is coming. How we react to it is what really matters. Stay informed, stay flexible, and you’ll be in a strong position to succeed no matter what the market throws at you.
If you’re feeling uncertain about the future or want help creating a strategy that’s tailored to your goals, let’s connect. I’d love to offer a free strategy session to help you navigate these changes and build a portfolio that can weather any storm.
