The real estate costs a lot of money up front, in the form of settlement costs. These costs range from mortgage fees, to recording fees and home owner insurance fees. The most of these fees are real estate tax deductible and when you calculate your taxable income.
The most cases of mortgage payment include taxes and if the borrower has high LTV loan, it probably includes mandatory private mortgage insurance. The laws get complicated here though, so be sure to consult the borrower accountant on this issue.
The government sees the depreciation as a 27.5 year-long decay in the value of rental property. Tax law is extremely complicated, and even more so when it comes to real estate investment, so be sure to hire a good account to prepare your return.
great post
ReplyDelete