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Does the Tax Cuts and Jobs Act change investing strategies?

On Behalf of | Jun 14, 2018 | Real Estate Investment |

With new tax laws emerging, more people are asking if real estate investing should also change. Investment strategies often consider tax laws, and with changing tax laws, it can be hard to know what exactly you need to do to keep your investments safe.

The Tax Cuts and Jobs Act is creating uncertainty when it comes to investment strategies, but it’s believed that it will encourage investor opportunities, especially in the commercial sector. There are tax incentives that aim to make real estate more attractive as an investment option.

Will the TCJA affect your investments?

Investment managers are still figuring out how to optimize their investments and hold times in light of the TCJA. However, some of the tax changes may cause asset hold times to increase. That may save on taxes but may also result in fewer quick-flip opportunities.

You may find yourself investing in more low-income housing, too. The Low-Income Housing Tax Credit makes investing in affordable housing profitable in a large number of cases.

The Tax Cuts and Jobs Act has its benefits and downsides. If you’re someone looking to invest at a high rate, then it can still benefit you, but your strategy may need to change. It’s a good idea to look into the TCJA closely and learn exactly how it impacts your current investments and the potential to earn in the future. With enough education, you can adjust your investing strategy to make the most of this tax change, which could help you make profitable decisions.

Source: WealthManagement.com, “Should Real Estate Investments Change in Light of the New Tax Laws?,” Max Sharkansky, June 01, 2018