How do we make money under socialism?

Now that socialism has arrived, thanks to both President Bush (the bailout president) and our next president “The One”, how will we make money in real estate. My biggest concern in the rental property business for a long time has been government intervention. On a local level, we see more intervention over time - such as new nuisance laws, attempting to put the water bills of deadbeat tenants on the landlord, etc. However, full blown socialism will be a completely different animal. Once “The One” starts changing the tax code, all bets are off. Will he directly tax wealth (as in net worth)? Will he declare a moratorium for evictions if the economy gets bad? Will he disallow the depreciation of investment properties? Will he raise capital gains (yes)? So, the question is how do we make money under socialism and how do we make money when we don’t know what the rules will be?

Can anyone suggest a good book on socialism?

Comrade Mike

Welcome the the United Socialists of America.

My hope is that it took at Carter to bring a Reagan; maybe it will take an Obama to bring Ron Paul (or someone similiar)

I have been freaking out also about this. I have another board that I post on geared more toward developing strategy. I really beat them up pretty badly last week. They were making suggestions that were not acceptable, but the only things available. I do not believe in investing with the “hope” that things will be ok 5 years down the road. I don’t want to walk into a trap.

Well we just had 8 years of NO HOLES BARRED CAPITALISM…

How’d that work out???


Are you kidding me???


This is all about super cycles and markets coming full circle. NOTHING CHANGES…EVER!!!

We are simply REPEATING the EXACT same mistakes that were made in the 1920’s.

Wait…think the stock market took a hit in OCTOBER???

You ain’t seen NOTHING YET. Wall St. STILL doesn;t realize that we are heading into a STORM like NOTHING we have EVER SEEN.
It boggles my mind when “experts” say they think we’ll see some “UPSIDE” in 2009 :shocked

Get ready boy’s…This sucker is going to somewhere around DOW 5000 before it’s over. That will be the historic, seen in every cycle, REVISION TO THE MEAN.

You MAKE MONEY during this by being SHORT!!

Short is right, but I’m just trading with small amounts of money right now (using covered calls). However, I’m waiting for a feeling of euphoria and a REAL bear market rally before shorting the market. I haven’t seen anything like that yet. I think that we need to hit 11,000 on the DOW AND have the talking heads talking 14,000 to accomplish that.

Making money in the rental property business is going to be more tricky. My concerns about tenants getting into financial trouble is starting to develop. I had one tenant in a $325 per month, 1 bedroom, low income apartment suddenly move out because he couldn’t afford the utilities. Another tenant in a 3 bedroom house told me yesterday that they are moving because they can’t afford the rent and utilities. A third tenant in a two bedroom house is moving in two weeks for the same reason. All three of these tenants work! Obviously, we are not even close to the cold weather in Ohio! This could get UGLY!

More concerning to me is that the socialists could easily pass regulations that would destroy the rental property business. For example, if they passed a moratorium on evictions, I could easily be out of business! Why? Because once a moratorium if put into place on evictions, a huge number of tenants would just stop paying rent. That already happens with natural gas. Ohio has a moratorium on turning off the tenants gas (heat) during winter, so a tenant can pay $175 to have the gas turned on and then freeload all winter before it’s shut off in the spring. That could happen with rent and that is a scary possibility!


You called all of this 2 years ago Mike.

…as did you and the scary part is that it is all coming true.


Who is the one “eating” the loss from the gas moratorium? If you have tenants who do as you described, but still pay their rent; does it affect you or are they just running up a huge bill with the gas company?

They’re just running up a huge bill with the gas company, which is of course paid by the honest customers. Just more of the “share the wealth” socialism that’s been getting worse for years!

Comrade Mike

I just got a letter in the mail from one of the cities that my rental properties are in telling me that the water bill has to be in my name b/c tenants are running off without paying them. They just passed this new code.

That means that if my tenants wanna run off the last month without paying the water bill, I’m stuck with it. How do I take care of this, do I add it to the rent or just ask them to pay whatever it is every month? But how do I have any idea on what the bill will be?

I’d make sure it’s written in your lease that your monthly rent amount is $XXX and that the tenant will also be billed for the water (since it’s going to be in your name) each month as well. I would also start holding an amount for deposit for water service too. The water dept. would probably hold some deposit amount anyway if the service was in the tenant’s name. That gives you a little buffer for that last month tenant situation you described.
I would not just build in a certain amount to the rent to account for the water bill. Make them pay for what they use.