What are the true tax advantages to owning rental property?

Write off:
1. Interest
2. Property tax
3. HOA fees

What else?

Looking at a property that would clear clear $225 per month (1250 cost with mortgage, escrow, HOA fees and property manager).

Op you know what write off means right? It’s a business expense. I say this because I hear ignorant idiots say things like ‘oh they just right it off’ like it’s free, shite isn’t free. You still pay for them, it’s just before taxes because it’s an expense.

You have depreciation and you have an expense. You can depreciate major items and the purchase price of the property minus the land value, then small things are an expense.

A deer lease to take your potential clients to.

Depreciation can be important. I'm not talking about true expenses here, that does cost real money after all. But depreciation for tax purposes assumes the property constantly loses value, which may not really be the case.

Basically you're doing an arbitrage play between what the IRS thinks is a useful life vs. the true useful life. If you're referring to residential real estate it'll take awhile (the IRS says you depreciate over 27.5 years) but the property may well wind up gaining value in reality.

Another one is collectible vehicles. Rent one out for display purposes at fairs and such, but don't drive it. You get to deduct the cost over five years even though it isn't being "used". When you sell you pay capital gains tax on the depreciated basis but that's still much less than tax on ordinary income, which is what you deducted.

1. Equity Capture

If you bought those houses correctly, you should have captured equity in each house.

2. Market Appreciation


3. Cashflow

4. Principle Paydown

1031 that stuff

yep roll that shite into a 1031. couldn't agree more. it also saves you the depreciation recapture you'd pay if you are a rental owner.