Tax write offs consideration

[Sezuo Daudu]

Currently looking at properties and analyzing deals. Should I be including potential property tax write offs while looking at deal such as depreciation, mortgage insurance...etc?

[Basit Siddiqi]

@Sezuo Daudu

You first want to set a criteria on what will qualify for an investment for you.(example 25% cash on cash return)

You then want to analyze investment properties to see if it meets your investment criteria.

It it good to look at tax considerations when factoring in a deal but most investors here look at cash-on-cash return.
Normally, the two differences between cash-on-cash return and taxable income are

cash-on-cash does not include depreciation expense but includes principal payments on the mortgage payments as a deduction.

When analyzing deals - I go based on cash-on-cash; it's easier to calculate and puts all investments that you analyze in a level playing field.