Good morning to the economics of hurricanes;
Roughly $200 billion of private wealth and public infrastructure was destroyed in Texas and Florida. For investors, one measure of immediate concern will be unemployment. In addition, the pace that tourism recovers in Florida and the speed Houston refineries come back on-line, will both heavily influence our GDP. The good news: Once rebuilding begins, GDP growth will again re-strengthen.
For commercial and residential property development, the full impact of the hurricanes will likely effect – even dramatically – the already short supply of qualified construction labor. With these pressing demands in Texas and Florida, one should anticipate a noticeable increase in costs across the country, particularly the impacted regions. This may last a couple of years, especially for those highly qualified in the trades. Let’s hope we see an increase in students at local technical colleges.
Next month’s letter will focus on nuggets-of-interest, concerning our economy, gained from recent educational events. Such events help keep my sense of perspective sharp and up-to-date, while providing profitable insights for our clients as to where and when to buy, sell, or exchange into new properties. What better way to protect profits, generate cash flows, and improve appreciation potential – whether for commercial or residential real estate, and regardless of one’s planning horizon.
This is an approach I first promoted in 2005. It helped keep my own real estate portfolio intact, during the last market turn down. No mean feat. It is why I stay up-to-date with the state of our economy – especially real estate investing. Truly, the “best“ data and perspective offers the best next step in real estate investing. It is key to every decision, whether a new client or those reviewing their investment portfolio.
“What do I do once I have sold a property?”
Here is a range of available options and possible tools to answer an important question, one often paralyzing a smart investor into non-action, even though action is called for:
- 1031 Tax Deferred Exchange
- Monetized Installment Sale
- Delaware Statutory Trust (DST)
- Delayed Sales Trust
Each has its own unique features and benefits, often calling for specialized professionals. And like you, we too call upon accountants or attorneys when prudence dictates. It is why we are successful. Yet more, if intelligent financing is needed to best accomplish your plan, we are here as your Lender of choice. Why us? As part of our service, we help our clients develop a successful exit strategy, one able to help maximize their future re-investment opportunities.
Like the overall economy, our commercial business is robust. Jobs and economic growth continue steady, with inflation a non-issue. Locally, high tech innovations of driverless cars (AI) and Internet of Things (IOT), should further spur new economic growth. An added benefit: World events show signs of improving – maybe.
Bottom line: Overall, our current economy is the good news for property sales and values. Gazing into the future, this good news should help reluctant sellers bring more homes to market. This in turn, will bring more buyers, seeking new alternatives. Amazing how markets quickly adjust to consumer demands, needs, and desires.
How does this all tie together with our monthly Commercial Success note? There is a close link between the buying and selling of homes, and commercial investing. And being the financing arm of both, it is important we stay close, as both help define what best fit the realities of our changing markets and discerning clients. Ultimately, it is the actual movement of real estate that supports a strong economy, grows our cities, adds tax revenues, and promotes healthy families. It is why we love what we do.
Give a call, we are always happy to work with you on strategies and solutions.
Have a fabulous day, as we remain Gratefully yours.