Hi,We recently (Aug 2024) bought commercial land of around 2 acres. this was part of bigger commercial lot (around 25 acres) which had AG exemption and so the taxes that they paid was around $20 each year. we received a 'AG ROLLBACK' letter from the appraisal district that starting 2025 tax year, we will be taxed at it market value resulting in additional taxes, interest and possible penalities for 3 prior years.

Quote from @Victor Yang:In addition, is it possible for me and my wife to gift 36k worth of equity per year of the house (under the annual exclusion limit) and therefore have none of the costs go towards the lifetime gift limit?

Otherwise, you may need to replace a water service (13-15k), electrical service (10-15k) and upgrade wiring (This is a tough one, but maybe an additional 8-15k inside).

Man, just in 3 years if you have the tenant leave every time, even without the negative cashflow, that alone can cost you an additional 20 or 30k.

My wife and I have one rental unit and are trying to move toward our next property, but still are trying to learn more and find additional ways to make some side income to speed the process.

This is due to bonus depreciation which allows taxpayers to deduct 40% of qualifying property costs in the first year, in addition to regular depreciation for new construction and improvement.

My advice would be to drown out the noise you hear from others with positivity and thorough due diligence.

We pride ourselves in keeping the forums positive, helpful, and focused on real estate (please, no politics, religion, etc.).

If OP can lever-up while maintaining adequate reserves, he will be in better position than buying with heavy cash position.  

I'm looking to purchase my first rental property and have been searching for a deal that would generate positive cash flow based on my projections.