“In the midst of chaos, there is also opportunity.”
– Sun Tzu
I believe Donald Trump is the greatest risk in multifamily investing today.
You might think that sounds crazy, but hear me out!
I’m not the biggest fan of Trump’s personality, but I do like what he stands for.
With that said, I still think he’s the greatest risk in Multifamily investing.
The reason I say this is because he’s talked about deporting millions of immigrants.
If you’re a multifamily investor, you know a lot of immigrants stay in those properties.
Them facing deportation is a huge risk.
Today, we’re going to get into why that is.
What will that do for investing?
We’ll also look into the potential new tax breaks.
Will the 2017 tax cuts come back?
Let’s jump into it!
1. ICE Immigration
ICE typically deports around 200,000 to 400,000 people per year.1
While the exact number isn’t known, Pew Research believes there are around 11 million illegal immigrants in the U.S as of 2022.2
Now, taking it back to multifamily:
Zillow came out and said we’re short around 4.5 million homes.3
If we were to deport 1 to 3 million people in a year, our population would be substantially smaller.
That’s a hard reality for certain areas in multifamily.
Population growth, job growth and income growth all affect this industry.
Some areas in Texas or Florida might end up growing, but it’s still a risk if the trend is population shrinkage.
Trump campaigned on deporting illegal immigrants.
We should take him at his word and prepare for how that will affect our investments.
Being prepared is always a good strategy.
2. Trump Era Tax Breaks
The first Trump era tax breaks were great for multifamily investing.
$100,000 of invested income often got reported as a paper tax loss of 70% to 100% for year one.
Remember: I’m not giving specific advice!
Always consult your CPA before making investment and business decisions.
I believe there’s a good chance these tax breaks will come back.
After the original cuts expired, we went from 100% depreciation to 40%.
That’s a mere fraction of what we once enjoyed.
It’s made real estate less attractive to investors.
If the tax cuts come back, we could see a lot of positive change in real estate investing!
3. So What?
Now that we’ve talked about two factors in play with the current administration…
What’s going to happen?
How will they both come into play?
If I’m being realistic, I think we’ll see a mixture of the two.
We’re going to see more deportations.
I don’t think it will be in the millions per year.
It could be on the higher end, but it won’t be a crazy amount.
I also think the tax breaks will come into play.
With the House and the Senate behind Trump, we could easily see tax breaks for real estate investors.
Keeping that in mind, we should prepare for any scenario.
The future isn’t written in stone, but we can certainly prepare for whatever may happen.
Now I want to hear from you!
Do you think we’ll see either of these policies happen in the next four years?
Let us know in the comments.
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Disclaimer: I am not your investment advisor. This is for educational purposes only. I am not giving specific advice on what you can do. I am simply giving my opinions.
Works Cited
1. “Table 39. Aliens Removed or Returned: Fiscal Years 1892 to 2019.” Office of Homeland Security Statistics. Accessed January 23, 2025. https://ohss.dhs.gov/topics/immigration/yearbook/2019/table39.
2. Passel, Jeffrey S. “What We Know about Unauthorized Immigrants Living in the U.S.” Pew Research Center, July 22, 2024. https://www.pewresearch.org/short-reads/2024/07/22/what-we-know-about-unauthorized-immigrants-living-in-the-us/.
3. “Press Releases.” The U.S. is now short 4.5 million homes as the housing deficit grows, June 18, 2024. https://zillow.mediaroom.com/2024-06-18-The-U-S-is-now-short-4-5-million-homes-as-the-housing-deficit-grows.
