Council Post: The Influence Of Politics And Policy In The Real Estate Market

Getty Politics is an important factor in determining the success of the real estate market. An open and friendly political climate can help a market grow, while one that is hostile can cause it to decline. What are the factors that can affect a market's favorability or disfavorability? Let's look at some examples. This is the most prevalent issue. Some countries and states tend to have laws that protect tenants more than landlords, while others do the opposite. Tenant-friendly laws can be less beneficial for real estate investments and less protective for investors. These policies can include rent price controls and more thorough screening. They also have obligations to long-term contracts, and may cause difficulties in the eviction process. Landlord-friendly policies, on the other hand, provide landlords with more protection in the event of default and allow for easier eviction processes. It is easy to see that policies and laws that are more favorable to tenants can scare investors who may then choose to invest in other areas. California laws tend to be more accommodating to tenants than Florida's. This has led to a substantial increase in Florida's investment, with many investors choosing not to invest in California.

Tenant-friendly policies and landlord-friendly policies will always be at the ends. Building Policies How easy is it to obtain a license? What are the restrictions if you have a license? Investors know that time is money. It is easier to start new projects in certain countries and cities, which will attract more investors. New investors can be scared if the licensing process is long and complicated. A simplified process would make it easier to create a stronger real-estate market. It is important to consider whether your license is conditioned upon something, or can you just move forward and complete the project. This is why I have seen many real estate investors relocate to Madrid, Spain where there are more opportunities and facilities for new construction. Real estate is subject to many taxes, including capital gains, property taxes and wealth taxes. The way that governments regulate these taxes can have an impact on how the market is viewed by investors. Different areas can compete for real estate investors by offering attractive tax policies. * Tax havens such as Antigua and Barbuda or St. Kitts and Nevis often try to get foreign investors to invest into their countries. * Spain has a 25 % capital gain tax, while Andorra, a microstate, has a 10 % capital gain tax. It is important for real estate developers to know the rules of urban law, which dictates what and where it can be built. Some areas allow for 20-story buildings, while others allow only two floors. Other places allow for smaller apartments within the same building. Others may only allow for a handful of larger apartments. My company was looking at a plot in Spain to build a multifamily home. The plot was large and affordable. We discovered that the plot had restrictions, such as the requirement for the ground floor to be used as retail and the restriction on the number allowed apartments. You can see that politics, and the resulting policies as well as zoning restrictions, are crucial to the future success of the real estate industry. How laws are implemented can have a significant impact on how a market develops or shrinks. Forbes Business Council is the leading organization for growth and networking for business leaders and owners. Do I qualify?