Taxes on Net Income from a rental property

[Anjali A.]

I would like to know if there are any tax benefits to investing the net income from a SF rental property that is fully paid off?

[Josh Calcanis]

Investing in what specifically? There are a lot of options you could reinvest that money into, just really depends on your comfort level and what the goal of the investment is. You've got a paid off SFH bringing in cash flow, you could 1031 and upgrade to something else, refi and invest that into another property, or you could just invest the cash flow into your RE portfolio or dive into the multiple ways of investing outside of real estate.

I'm not a CPA, but at the end of the day, the income from your properties are realized when you receive them. There isn't a way to 'hide' them from the taxes by immediately putting them into another investment. 

The only way I can imagine something would immediately go back into an investment (and maybe avoid taxes UP FRONT) would be if you funded part or all of your deal with your IRA or 401k, in which case you have to pay back whatever percentage of income is equivalent to your 'loan.' This doesn't apply to you though because your house is paid off (unless you did fund part of your deal with a retirement account.