Owning real estate has many benefits, but Investing and leveraging your Real Estate portfolio can lead to even more perks! Let’s check a few of them out:
Real Estate Tax Write-Off
One of the best perks of investing in Real Estate is that you get to deduct expenses directly tied to the operation, maintenance, and management of the property:
- Property taxes
- Mortgage Interest
- Management fees
- Cost of Maintenance
- Additional marketing, business, legal costs
With investing in real estate, not only will you have cash flow, but you also have tools to lessen your tax liabilities/taxable income. That will save you a significant amount of money.
Over Time Depreciation
It’s not a secret that your property will have typical “wear and tear”, but in the investment world you can use it as an advantage. As an investor – you can deduct depreciation on your taxes
Deferred Tax Payments
The government has a special tax code to encourage investors to purchase new properties. If you are selling your investment property and purchasing a new one with the same or greater value, then you are qualifying for a special incentive program called 1031 exchange. This program will allow you not to pay capital gains taxes on the sale of the property.
You can use the 1031 exchange indefinitely. Keep in mind, when you choose to cash out on your investment without purchasing a new one – you will pay full capital gain tax.
Here we shared with you the Top 3 large tax benefits, but there are plenty more. Please talk to your tax advisor for more information and any clarification and if you feel like you are READY TO INVEST in Real Estate – reach out! We have an amazing Team that will assist you every step of the way in your next investment purchase. Contact Us!
