This is most of the depreciation you are taking year one.You can calculate your depreciation recapture by taking the sale price of the asset and subtracting the adjusted cost basis.The adjusted cost basis is what you paid for the asset plus any improvements you made along the way minus the depreciation you took along the way.The profit above this original cost is taxed as a capital gain, but the part linked to depreciation is taxed at a maximum rate of 25% under the unrecaptured gains of section 1250.To recap the tax rates are:- Sec. 1250 real property: 25%- Sec. 1245 property and 15 year 1250 property: Ordinary Tax RatesThere are ways to minimize depreciation recapture especially if you know how to work smart with your CPA.1) Asset Valuation at Time of Sale - Sellers can minimize recapture by reallocating the price of the assets on sale.

I will probably avoid these guys for the moment, as I would hate to have capital tied up in lawsuits.  

Quote from @Jeremy Dugan: I am a US Air Force and Massachusetts Air National Guard veteran with 20-years of experience as a military Civil Engineer.

To maximize its appeal, highlight rental performance, market it on investor-focused platforms, and consider selling before the academic year to attract buyers ready to capitalize on rental income.Good luck!

Quote from @Melanie Baldridge: Why I like investing in real estate more than 401(k)s.Both offer tax deferrals, but here's the difference:If you're making pre-tax contributions to your 401(k), then withdrawals = ordinary income tax.With real estate gains, you're paying capital gains tax (which is typically lower).Plus, RE investors get:1.

I've learned through my 4 years of experience within real estate that my strengths and best used in raising capital.

@Tori Rhodes faster ways to scale:Buy a portfolio from another investor- Get seller financing from a savvy one that doesn't want capital gains hit!

:Quick access to capital.

You can often get better rates with a national lender, but the customer service is non-existent, communication probably sucks, they may ask for the same documents multiple times, etc.

No but keep track of those repairs as it will add to your cost basis when you go to sell it and have to pay capital gains.