Quote from @Melanie Baldridge: In 2025 the bonus depreciation rate is 40%.This means that if you bought a property for $1M in 2025, did a cost seg study and found $300K in eligible assets that you could depreciate, you could take 40% of that $300K as bonus depreciation to offset your income in the first year.40% of $300K = $120K.You then apply that $120K to the owner’s personal tax rate to find the final amount that they can defer in year 1.If your tax rate is 37%, you can defer $66.6K.This is a big deal even at the 40% bonus depreciation rate this year.It’s a massive benefit 

Think About Future Value & Target Demographics•Check the average income levels in the area.

My name and my daughter’s name(s) are also in title and the loan.I have really good equity in both properties (six figure) with great interest rates.At some point my daughters and their husbands will move out to upgrade to something bigger.I want to turn these properties into investment properties after my daughters move out:  thinking the best way is to convert in my name only.Also considering leveraging the equity in the properties to help buy new homes/townhomes for my daughters when they are ready as well.Wondering what the best strategies would be for me to expand property portfolio, minimize tax impact , create more passive income while continuing to help my family grow.I appreciate any advice! 

The properties do not have to cash flow a significant amount (although I wouldn’t hate that) they just have to sustain themselves as we have three incomes between us and not looking to quit our W2’s to live off cash flow.

Tax deductions / write-offs should be a second concern.There are some rules that you need to follow to treat a short-term rental as 'active'(non passive) income which would allow you to offset it against other forms of income such as rental income / wages.

This has prompted me to look into a software to track income and expenses.

Projected annual income is 20% of the purchased price.  

I want to work my way into anything full time because I have a decent job now but eventually i want to have real estate/construction replace my income. 

They don't require employment verification, income or tax returns.

First of all treating rental income as a hobby is a very bad idea.