When it comes to real estate investing, the diversification it provides and the potential for income from rental properties are often the benefits most front of mind. But investors would be remiss if they didn’t also take into account the tax breaks real estate investing provides. Taxes are complex and the specific tax breaks real estate investors may be eligible for will depend on many factors. That being said, two of the most common tax breaks for real estate investors are deductions and depreciation.
Those who own real estate, especially rental properties, have a large variety of deduction options. Some of the potential deductions real estate investors may be eligible for include interest on the mortgage, property management fees, property tax, property insurance, and repairs or ongoing maintenance.
Another fantastic tax break opportunity that comes with real estate investing is depreciation, which allows an investor to deduct the loss of the property over the expected life of that property. Since depreciation is only available to businesses or properties that produce income (such as rental properties), it’s a great opportunity for real estate investors.