Originally Posted by
gloopy
Both education and real estate are massive bubbles and no politician on either pretend side will ever allow either to be fixed in a sustainable way. They'll just keep pumping til they pop then hope they can bail it out.
You've identified one more reason to own income producing real estate. The taxpayer will bail you out. Don't hate the player...
Reasons to own income producing real estate.
1. Indexed to inflation. With leverage, you actually profit from inflation.
2. The inflationary bias of central banks and the federal government create powerful allies.
3. The government subsidizes the investment through the tax code by allowing depreciation on an appreciating asset.
4. If the entire market goes in the tank, they will try their hardest to bail you out.
Ways to make money with real estate and pay less in taxes.
1. Equity capture through value add properties. Preferably via contractor sweat equity vs your own.
2. Cash flow from rent exceeding expenses and debt service.
3. Principle reduction through amortization.
4. Appreciation on the asset, that could be multiplied with smart leverage.
5. Tax savings through depreciation and possibly tax deferred exchanges.
Neither education or cost of housing will get solved until lawmakers address the constrained supply. Fees and regulations surround development of new housing ensure that affordable housing won't be built. Embracing technology as a method of distributing education is a great start on that avenue. Adding "free money" just makes it more expensive.