Tax Strategy for Buy and Hold?

[Ying Tang]

Hi BiggerPockets community!

I’m looking for some tax-saving strategies related to my buy-and-hold approach. My game plan is to purchase properties that generate positive cash flow from day one. For each deal, I put down the required 25% for rentals. For example, property #1 cash flows about $300/month, property #2 about $400/month, and so on.

I’m a new realtor currently accumulating hours for real estate professional status, and besides taking advantage of accelerated depreciation, I’m wondering what other strategies I can use to reduce my tax liability when all my properties are positive cash flow from the start.

Specifically, should I be using that cash flow to make additional mortgage payments, or would that be less tax-efficient? Also, how might this strategy interact with capital gains from frequent stock trades (I’m in the 37% bracket)?

For some context, I have enough other income to cover multiple down payments, so I’m not reliant on the rental income for my personal cash flow.

Any insights or advice would be greatly appreciated!