Calculating taxable income reductions into a deal?

[Chris C.]

Hi. One reason I am exploring investing in real estate rentals out of state (I’m in CA) is to offset realtor commissions. Please correct me if I am wrong, but it’s my understanding paper loses from a rental can reduce your overall taxable income.

My question is, do you use this while analyzing a deal? Would a deal that breaks even or has a slight negative cash flow make sense in this situation?

The true goal is gaining equity and appreciation. Cash flow is secondary, but I do want the investment self sustaining. I was just wondering if I should be looking into markets like Austin or Sacramento (where I could elimjnate the buyer side commission!)

Thanks!