Do You Know All the Benefits of Rental Property?
Business ■ Financing ■ Credit ■ Loans
We Have One Goal - To Help Real Estate Investors Grow Their Portfolios and Entrepreneurs Grow Their Business
1. The use of leverage - Real estate is one of the few investment vehicles where using the bank's money couldn't be easier.
2. Tax deferred growth -Buying rental property based on speculation of its value is a dangerous tactic since cash flow is the key. However, appreciation over the long run is certainly realistic and at the least, you should be considering a tax-deferred strategy. You may even consider a 1031 exchange, charitable trust or installment sale to lessen your tax liability further.
3. Tax-free cash flow. It's no secret that because of depreciation and mortgage interest deductions (if you leverage your capital), your cash flow should be tax-free. That's right! The far majority of the time, an investor will never pay taxes on their cash flow and can wait for capital gains on the sale of the property in the future.
4. The tax write-offs against your other income.Having a rental property affords investors with another incredible opportunity to convert personal expenses to potentially valid business deductions. Also, depending on your classification as an Active Investor or Real Estate Professional and your income level, there is a good chance that your rental property will give you an overage of tax deductions that you can use against your other income. With that said, this is something you will want to discuss with your tax professional before investing so that your expectations are realistic.
5. Rental real estate is a forced retirement plan.Americans are terrible savers. We lack the self-discipline to put a monthly deposit into our IRA, SEP or 401k as small-business owners. However, buying a rental property is a significant commitment that you are required to commit to and maintain. You will always be grateful in the long run when you don't give up on it and build future cash flow and wealth.
© 2001 - 2016 All Rights Reserved, MorlinoandLathea.com