Renting new construction for a year then selling to save on taxes

[Daniel B.]

Hi,

I understand rental properties are not earned income so you don’t have to pay self employment tax on them.

Has anyone fixed up flips or built new construction and instead of selling immediately, either rented for a year or did a lease purchase for a year minimum so it would be considered a long term capital gains....taxed lower? I assume lease purchase is the better option so you don’t have to spend costs fixing up the unit after the tenant moves out.

Typically I have heard of lease purchases being done in order to get a better price for the house, but I wasn’t sure if anyone out there was choosing to do it for the tax benefits as an investment strategy.

Thanks in advance...