Posted by Collette | Posted in Tax Credits | Posted on 17-03-2010
Investment real estate can generate substantial write-offs.
If you own rental property you must seek a fair market rental for your property. You may generally deduct mortgage interest, property taxes, repair costs, management by an outside party, depreciation, advertising, insurance, utilities, legal services and other expenses.
It’s possible with rental properties to have both a positive cashflow and a loss for tax purposes. However, the ability to use real estate losses to reduce overall taxes may be phased out as adjusted gross income rises above $100,000.
If a rental involves relatives special rules and restrictions may apply. Check with a tax pro for details. However right now is a great time to purchase investment property. With values near or at the lowest value we have seen in years if you have a desire to own income property now may be the time to jump in. One thing to be aware of is that the loans offered for investment properties require 25% – 30% down payment and typically care a slightly higher interest rate.
If you would like to know more about qualifing and purchasing an investment property give me a call.
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