If you’ve been looking into investment opportunities then you surely have come across a lot of advice about buying real estate. It is one of the safest and most reliable investment incomes there is. But, being a landlord is not always easy and there are expenses when it comes to real estate.
That said, there are a number of ways to lower your expenses when you are a landlord so don’t be frightened off when you see how much you will pay in taxes and fees as a real estate investor.
In this article, we will go over how you can lower your bills as a landlord so you can increase your profit margins on your investment.
Lower your property tax bill
Property tax can take quite a big chunk of the money you’ll be paying especially on the house that you actually live in. Hiring a property tax lawyer like Ryan J. Gibbs will help you lower the property tax bill that you have to pay to the local tax authority.
It starts by challenging the assessed value of the property. Whether it is a big box store or your small rental apartment, the value is likely overinflated. Lowering what the town has your property valued at will reduce how much you have to pay in taxes.
You won’t be able to lower the tax rate, but the amount that you pay. Be careful if you are a house flipper, however. Lowering the value just before you are looking to sell could affect the asking price of the property.
Tax write offs
There are a lot of benefits when it comes to taxes when you are a landlord. Any homeowner gets some tax relief through their property, but a landlord gets some extras.
Besides things like a mortgage interest deduction, which only applies to your first home unfortunately, you can also deduct expenses since this is a business.
Some of those expenses are related to any repairs that you have to do on the property. There is almost always something that needs to be fixed in a rental property so you can have that write off for years to come. This includes the materials that are used to make the repairs.
Then, if you have to travel to the property to check things out or to make the repairs yourself, you can write off the cost of traveling there.
Lastly, any office equipment that you use to keep your real estate business running is also available as a write off. Your home office, computer and any rent you pay to manage the property is all deductible.
Choose your tenants wisely
Bad tenants can cost you a lot of money and wipe out any gains from your investment. From not paying the rent to damaging the property, these types of people are to be avoided.
Make sure that you require a credit check for new tenants with their application and that they have references so you have an idea of what kind of tenant they are likely to be.
