Tax Benefits

Tax benefits.

Did you know if you earn $200,000 at your own business an investor earns 200,000 through rental properties, who get’s to keep more? Did you also know that COST OF SERVICES such as property management is a tax deduction?

You guessed it: Investors do. Because the government allows landlords to receive tax benefits for their investments.

Not only is the cash flow received from your rentals not subject to self-employment tax, the government offers tax benefits including depreciation and significantly lower tax-rates for long-term profits.

As a landlord, here are 8 property tax deductions that can be accompanied with residential/commercial types of real estate investments:

  • Cost of services (rental property management & legal consultation or services)

  • Depreciation (non-cash expense) deduction from income. This real estate tax deduction is based on the perceived decrease in the value of the real estate.

  • Mortgage interest tax deductions from income. A mortgage interest tax deduction is the interest you took for your mortgage loan and this real estate tax deduction is usually your biggest one. Also, remember to deduct your mortgage insurance premium if you took one out.

  • Deferral of capital gains via 1031 exchange

  • Cost of repairs, maintenance, and upkeep

  • Utilities

  • Travel costs associated with the property (checking on the property, inspection, repairs, etc).

  • Property tax deductions

*Always speak to a tax attorney for the most up to date information

Looking for more great tips for investing in Real Estate? Check out this Guide to Real Estate Investing.