Tax Benefits from Rental Property

[Chase Woodard]

Hey Guys,

So I’m a noob & trying to learn everyday. What I’ve been trying to understand is how Real Estate is so great for taxes.

I’m planning on getting a rental property & was wondering what tax benefits do you get from a rental property & are there anything I need to be aware of?

Any help is appreciated! Thanks.

[Chris Coleman]

@Chase Woodard

Depreciation is key. It allows you to take losses on rental property, such that on paper (for tax purposes) you made less or even no money. When in reality, you collected rent income and have cash in the bank.

It can be a difficult concept to grasp, until the first year you own that rental property and do your taxes. You then see how powerful it is when your tax return shows a loss on that property so you pay no income taxes on it, but you literally have $4,000 (for example) cash income in your account.