Tax Considerations for Out-of-State Investors in San Diego

[Matt J.]

Hey everyone! I've been investing in real estate since 2017 and have seen that the real money or wealth made in this field is in equity build up moreso than in cash flow. San Diego, to me, seems like a market that still has a lot of upside due to the building constraints in the area, the desirability, and the strong economy. 

What are some tax considerations or other legal issues to keep in mind as an out-of state investor investing in this market? Obviously I'm not looking for thorough legal or tax advice here, but just things people have come across in their experience. 

[Basit Siddiqi]

If you are buying a high cost property with litle to no cash flow, you likely don't have to worry about paying tax on rental income since your depreication will wipe out any cash flow from being taxed.