So have this book coming in the mail today,
The Book on Tax Strategies for the Savvy Real Estate Investor
However, I was hoping that besides tax strategies, that someone could say in plain words how they would explain how do you prove that only a portion of your rent is going in your pocket?
My tax rate is 24% and currently it is on the cusp of going into 32%, but any additional "taxable income" that I may have, could end up costing me way more in taxes than income I could make. So I'm trying to see the negative of reducing cashflow, if it is a good idea, more risky... etc.
So at the moment, yes would be nice to have more 'cash flow', but in my current situation, I make enough money from my day job that I'd be comfortable working 9-5 until I had developed a substantial amount of wealth. Which I get, that you can take cash flow and turn that into deposits for future investments.
I don't quite understand buying homes using home equity loans, but it really sounds like if you owe X on your house and your house is worth Y you can borrow an amount equalled to the difference. This is way over simplified, but just to aide in asking my question.
So if I bought a home and rented it out for $1000/mo, the expenses, include the minimum on the mortgage, came out to be $750. And I have the leftover cash flow of $250. What is keeping me from, taking that $250 adding that to the mortgage payment? But I'm guessing somewhere in my accounting this would become evident, and would still be considered income. So instead what if I did a 15 year mortgage instead of a 30, or whatever trick that can increase the payment, reduce the cash flow and increase the amount going to principle.
If I planned on keeping my first investment home, building up equity in it, and then using that equity to buy my next property, does it make sense to try to lower my cash flow?
