Tax Benefits of Investment Real Estate

Legally pay less taxes!  One thing that many people do not understand is how beneficial investment real estate can be from an income tax standpoint.  While there are many types of real estate investments, let’s look at a single family rental home.  The closing costs you pay when you buy it are deductible.  The property taxes and any mortgage interest are deductible. Repairs, maintenance, utilities, insurance, property management, and others are all deductible.  Then there is depreciation. You can write down the costs of the property (but not the land) over 27.5 years. In fact, if you do a cost segregation analysis, you can speed up portions of the depreciation.  When you sell the property, you can defer the capital gains by using a 1031 exchange to buy another property. Or you can do seller financing to spread out the gain from one year to many years.  There’s more, but I’m about out of time. Interested in learning about it, contact me today.

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