The mid-term elections recap: little change for real estate investing

The mid-term elections have come and gone on Tuesday this week, only just two days ago. And because both houses will be controlled by Republicans starting in January, it doesn’t necessarily mean that the party of big business will take existing banking laws and revamp them en masse, along with their protections to the American people.  Current banking loan standards will most assuredly stay in place, and the concomitant tight credit atmosphere that comprises today’s investment property mortgage market shall unfortunately remain unfettered.

On the downside for property investors

The investment property mortgage marketplace will remain as is, with very tight credit available. There’s simply too much downside for Republicans if an easing of current banking reforms (created since the banking crisis of 2008) were to be repealed, and a new banking crisis were to develop anew.  Of course, President Obama would never allow any stripping of current banking mortgage protections, would the Republican majority try to proffer any revisions to current law.  Obama would simply use his veto power to stop any changes in their tracks.

Minimum wage laws – some good news for property investors

Even with the Republican’s sweeping into a Senate majority, thereby controlling both houses of Congress in two months, don’t expect any major change in effects for property investment opportunities. Republicans will be quite averse to legislating anything that could hurt big business (and, to a major extent, small business as well).  Before the election, there was at least a hint of a Democratic push for a major hike in the federal minimum wage.  That will be tossed to the junk heap now.  In addition, the wave of Republicans winning major state governorships on Tuesday, will mean that, even on a state by state level, minimum wage hikes will most probably remain at or near inflationary levels only.  Even with the mass of protests by fast food workers this past year, expect the prospect of a $15 per hour minimum wage to be a pipe dream for at least several more years.

Keeping costs down

How does this affect the average property investor investing in real estate? Simple. If you don’t already do the menial maintenance work around each of your rental properties yourself, then you probably hire others to clear the walkways of snow, rake the leaves, empty the gutters, etc. As you keep adding on investment properties to your empire, these seemingly small costs become quite large when taken together.  Whether you hired the labor yourself – or had your property manager do so – you still end up paying for this maintenance on each rental property you own.  The prospect of a hike in the minimum wage would have definitely put a dent in your rental property cash flow.  So with the Republicans being victorious on a national scale, expect to keep your maintenance costs at or near current levels.  And that’s some good news that property investors can cheer about as a result of Tuesday’s elections.

 

photos courtesy of nola.com, socalfools.org, myweathertech.com, trashitman.com