Tax Advantages of Owning Rental Properties

It’s no secret that I firmly believe that owning income-producing, rental real estate is the best way to protect and build wealth.

By finding the right property and carefully structuring the deal, you leverage your capital by getting lenders to purchase the property for you and then paying the mortgage with the rents you receive from your tenants. Plus positive free cash flow after all the building’s expenses are paid.

It’s a time-tested, repeatable strategy.

But as 2015 draws to a close, there’s another element to consider: investing in rental real estate can also carry substantial tax advantages. It’s important to consult your own CPA, tax advisor or attorney, but by acting before the first of the year you may qualify for credits and deductions that are extremely beneficial to your current tax situation.

All of the following may be deductible:

  • Interest – Mortgage interest payments on loans for buying or improving your property
  • Depreciation – Reductions in the value of your building due to wear and tear and deterioration, provided you hold the property for more than one year
  • Repairs – The cost of all ordinary, necessary and reasonable repairs to your property
  • Insurance – Virtually all insurance premiums, including but not limited to fire, theft, flood, liability, employees’ health and workers’ comp
  • Employees and Independent Contractors – Payments to resident managers, maintenance people, repairmen, attorneys, accountants, etc.
  • Casualty and Theft Loss – Damages due to fire, flood, earthquake, other disaster, thefts or vandalism not covered by insurance

I’m eager to put my dedicated expertise and experience to work for you, to increase your returns, reduce your risk, and take full advantage of all the tax benefits you’re entitled to. Benefits that may even be applied against your other tax liabilities.

But remember, I am not an attorney and none of this should be viewed or taken as tax advice, nor is it intended to be used for the purpose of any federal and provincial tax penalty protection. All financial recommendations, including tax advice, must be tailored to your specific circumstances.

Let’s get the new year started off in a positive direction; contact me, your trusted local real estate professional, by phone at (905)940-3599 or by email at info@samjia.com today. Let me go to work for you right away!

 

 

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