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Why Invest in Real Estate?
Homes typically increase in value, build equity and provide a nest egg for the future. Your costs are predictable and more stable than renting because they're ideally based on a fixed-rate mortgage. The interest and property tax portion of your mortgage payment is a tax deduction.
Tax Deductions on Rental Property
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Depreciation (non-cash expense) deduction from income. This real estate tax deduction is based on the perceived decrease in the value of the real estate.
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Mortgage interest tax deductions from income. A mortgage interest tax deduction is the interest you took for your mortgage loan and this real estate tax deduction is usually your biggest one. Also, remember to deduct your mortgage insurance premium if you took one out.
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Deferral of capital gains via 1031 exchange
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Cost of repairs, maintenance, and upkeep
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Cost of services (rental property management & legal consultation or services)
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Utilities
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Travel costs associated with the property (checking on the property, inspection, repairs, etc). You can even deduct real estate taxes for the gas you used on your rental property visits.
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Property tax deductions
