Many new real estate investors have not experienced the power of depreciation and flow through losses from rental real estate. This is essentially the strategy of buying rental property that cash flows but “on paper” is losing money because of the method by which you write off the purchase, i.e., depreciation. By the time an investor deducts the mortgage interest, repairs, maintenance and depreciation, the project creates a “tax loss,” even though you may be collecting enough rent to cover the mortgage.
More than any other profession, real estate investors have the most to gain from rental real estate. I recommend every investor take the time to study and learn about rental real estate and the related deductions, such as depreciation, chattels and tax-free appreciation. Many times the greatest financial return from rental real estate is not the cash flow from the rental itself, but from the tax-free appreciation and the losses that flow through to the investor’s personal tax return from the operations of the business. A “real estate investor” who is entitled to potentially deduct these losses, while other professions and industries don’t have such a luxury.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125