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Real Estate Tax Incentives
Lower Your Taxes Tax incentives for real estate investors can often make the difference in your tax rates. Deductions for rental property can often be used to offset wage income. Tax breaks can often enable investors to turn a loss into a profit. For which items can investors get tax breaks? You could claim deductions for actual costs you incur for financing, managing and operating the rental property. This includes mortgage interest payments, real estate taxes, insurance, maintenance, repairs, property management fees, travel, advertising, and utilities (assuming the tenant doesn't pay them). These expenses can be subtracted from your adjusted gross income when determining your personal income taxes. Of course, these deductions cannot exceed the amount of real estate income you receive. In addition to deductions for operating costs, you can also receive breaks for depreciation. Buildings naturally deteriorate over time, and these "losses" can be deducted regardless of the actual market value of the property. Because depreciation is a non-cash expense -- you are not actually spending any money -- the tax code can get a bit tricky. For more information about depreciation and various tax alternatives, ask your tax advisor about Section 1031 of the U.S. Tax Code. Have a Positive Cash Flow There are two kinds of positive cash flows: pre-tax and after-tax. A pre-tax positive cash flow occurs when income received is greater than expenses incurred. This sort of situation is difficult to find, but they are usually a strong and safe investment. An after-tax positive cash flow may have expenses that outweigh collected income, but various tax breaks allow for a positive cash flow. This is more common, but it is generally not as strong or safe as a pre-tax positive cash flow. Regardless of what kind of real estate you choose to invest in, timely collections from your tenants is absolutely necessary. A positive cash flow -- whether it be pre-tax or after-tax -- requires rental income. Be sure to find quality tenants; a thorough credit and employment check is probably a good idea. Use Leverage One of the most important factors in determining a solid investment is the amount of equity you are purchasing. Equity is the difference between the actual worth of the property and the balanced owed on the mortgage. Benefit from Growing Equity While investing in real estate is relatively complex, it is often worth the extra work. When compared to other financial investments, like bonds or CD's, the return on investment for real estate purchases can often be greater. The key to real estate investing is equity. Determine an amount of equity that you want to achieve. When you reach your goal, it's time to sell or refinance. Determining the proper amount of equity may require the assistance of a real estate professional. Neda Dabestani-Ryba is a licensed Realtor in Maryland. She is a member of the President's Circle of Top Real Estate Professionals. She can be reached at (800) 536-3806 or visit her website for more information: http://neda.dabestani.pcragent.com/Prudential Carruthers REALTORS is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity
MORE RESOURCES: How a Real-Estate Investor Rents by the Room to Maximize Cash Flow Business Insider Mayor Adams' crony approves lucrative NYC real-estate leases that reek of 'corruption,' rages councilman New York Post Deal brokered by top NYC real estate official Jesse Hamilton scrutinized by City Council New York Daily News Ranked: Real Estate Bubbles by Change in Home Prices (2014-2024) Visual Capitalist Experts closely watch SWFL real estate market after Helene, Milton Gulfshore Business Junior real estate student selected as Eisenberg Scholar Marquette Today News | TGI Fridays' closings could make some prime real estate available in tight retail market CoStar Group eXp rolling out rev share changes Real Estate News Amazon made Volusia's biggest real estate buy of 2024. Here's the rest of the top 10. Daytona Beach News-Journal Axis Real Estate Investment Trust Third Quarter 2024 Earnings: EPS: RM0.022 (vs RM0.024 in 3Q 2023) Yahoo Finance How the Presidential election really impacts the real estate market Mortgage Professional Agents see a brighter sales outlook ahead Real Estate News Specialized Real Estate Group, NWA Land Trust finalize deal to preserve acreage at Markham Hill in Fayetteville Arkansas Online NAR settlement doesn’t pass the ‘real world’ test Real Estate News Co-founder of MCB Real Estate discusses possible outcomes for Harborplace redevelopment - WBAL Radio Real estate secondaries continue fundraising momentum Secondaries Investor Grand Opening Celebration Held at Anthem Everett Boston Real Estate Times Boston Financial Closes $170 Million National Multi-Investor Fund Boston Real Estate Times Pinellas Beaches Real Estate October 22-25 The Gabber Newspaper Financial Services firms redesign wealth management spaces for next-generation clients Boston Real Estate Times Burlington Mall Completes Multimillion-Dollar Transformation Boston Real Estate Times Experts rank DFW. No. 1 for real estate potential Dallas Business Journal Anthem Citizen Real Estate Development Trust Raises C$82 GlobeNewswire RE/MAX Revealed as #1 Real Estate Brand on Franchise Times Top 400 for 16th Consecutive Year PR Newswire News | Property pros look for film, tax credits to help lure real estate demand back to Los Angeles CoStar Group October 22-25 Gulfport Real Estate Sales The Gabber Newspaper Julie Robinson named first head of healthcare real estate at Clarion Partners Pensions & Investments Real Estate disruptor ComFree is Back Yahoo Finance Brooklyn Homes for Sale: All Four Sold Brownstoner Invesco Real Estate Closes on $1.7 billion of Loan Commitments Across 24 Loans in North America through 3Q24 PR Newswire RE/MAX Revealed as #1 Real Estate Brand on Franchise Times Top 400 for 16th Consecutive Year StreetInsider.com NexPoint Real Estate Finance, Inc. Announces Quarterly Dividend StreetInsider.com RE/MAX Revealed as #1 Real Estate Brand on Franchise Times Top 400 for 16th Consecutive Year StockTitan Local real estate firm to merge with national brand, expand footprint The Business Journals Unused Property? Driving Successful Lives provides the Solution: Donate Real Estate in Flint to Support PR Underground Anthem Successfully Closes on First Real Estate Development Trust IPO on a Canadian Asset GlobeNewswire NexPoint Real Estate Finance, Inc. Announces Quarterly Dividend Financial Times Tag Archives: Storie Real Estate InkFreeNews.com U.S. Banks Sitting on $750 billion In Losses On Real Estate Debt Related Securities-Which Sectors Are Most Exposed? Yahoo Finance My View: Harris, Trump offer different takes on real estate investment The Business Journals Berks County real estate transactions for Oct. 27 Reading Eagle Nicola Wealth Real Estate and Townline Celebrate Completion of Meridian Residential Project in Coquitlam, B.C. GlobeNewswire Westchester-based real estate investor goes on SoHo shopping spree Crain's New York Business NexPoint Real Estate Finance, Inc. Announces Quarterly Dividend Star Local Media Floyd Mayweather Inks Monumental $402M Real Estate Deal To Acquire Over 60 Affordable Housing Buildings In NYC Black Enterprise Utah Housing Market Forecast for Next 2 Years: 2025-2026 Norada Real Estate Investments High-end deals lost steam in September; million-dollar sales stayed strong The Business Journals Driving Successful Lives Opportunity to Make a Lasting Impact on this Holiday Season by Donating Real Estate PR Underground Why Hampton Roads real estate agents are optimistic about the region’s housing market The Virginian-Pilot These are the Best Real Estate Deals of 2024 Tampa Bay Business Journal Real estate company to double headcount after $100 million investment The Business Journals Nashville ends reign as top city to watch, falling behind Florida and Texas The Business Journals |
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