Rental real-estate provides more tax benefits than pretty much any other investment.

Every year, millions of owners pay more taxes on their rental income than they have to. Why? Because they fail to exploit all of the tax rebates available for owners of rental property. Investment real estate provides more tax benefits than pretty much any other investment.

Frequently these benefits make the biggest difference between losing money and earning a decent profit on a rental property. Here are the top 10 tax repayments for owners of home rental property:

1. Interest

Interest is often a landlord’s single largest deductible expense. Typical instances of interest that landlords can deduct include mortgage interest charges on loans used to get or improve rental property and interest on cards for services or products utilized in a rental activity.

2. Depreciation

The cost of a home, apartment building, or other rental property isn't completely deductible in the year in which you pay for it. Instead , landlords get back the price of property through depreciation. This implies taking some of the cost of the property over a few years.

3. Repairs

The cost of repairs to income property (provided the repairs are normal, mandatory, and reasonable in amount) are fully deductible in the year in which they're sustained. Great examples of deductible repairs include repainting, fixing gutters or floors, fixing leaks, plastering, and replacing broken windows.

4. Local Travel

Landlords are entitled to a tax reduction whenever they drive anywhere for their rental activity. For example, when you drive to your rental building to handle a tenant complaint or go to the appliance store to get a part for a repair you can subtract your travel expenses.

If you drive a car, SUV, lorry, pickup, or panel van for your rental activity (as most landlords do), you have two options for subtracting your vehicle costs. You can:

• deduct your exact expenses (petrol, upkeep, repairs), or
• use the standard mileage rate (56.5 cents per mile for 2013). To be accepted for the standard mileage rate, you must use the standard mileage technique the first year you employ a auto for your business activity. Furthermore, you can?t use the standard mileage rate if you have claimed speeded up depreciation deductions in prior years, or have taken a Section 179 reduction for the vehicle.

5. Long-haul Travel

If you travel overnite for your rental activity, you can subtract your flight ticket, hotel bills, meals, and other costs. If you plan your journey carefully, you can also mix landlord business with pleasure and still take a deduction.

Nonetheless IRS auditors closely size up deductions for overnight travel? And many taxpayers get caught saying these reductions without correct records to back them up. To remain within the law (and avoid unwanted attention from the IRS), you want to correctly document your long-distance travel costs.

6. Home Based Office

Provided they meet certain minimal requirements, landlords may subtract their home office expenses from their taxable income. This reduction applies not only to space devoted to office work, and additionally to a workshop or any other home workspace you use for your rental business. This is true whether you own your house or house or are a renter.

7. Workers and Independent Contractors

If you hire anyone to perform services for your rental activity, you can deduct their salary as a rental business cost. This is so whether the worker is a worker (for example, a resident manager) or an independent contractor (as an example, a repair person).

8. Casualty and Theft Losses

If your rental property is damaged or destroyed from a unexpected event like a fire or flood, you may just be able to acquire a tax reduction for any part of your loss. These sorts of losses are called casualty losses. You often won’t be able to take the entire cost of property damaged or demolished by a casualty. How much you can take depends on what quantity of your property was destroyed and whether the loss was protected by insurance.

9. Insurance

You can take the premiums you pay for nearly any insurance for your rental activity. This includes fire, theft, and flood insurance for rental property, as well as owner liability insurance. And if you have workers, you can deduct the cost of their health and workers? Compensation insurance.

10. Legal and Pro Services

Ultimately,. You can take costs that you pay to attorneys, accountants, property management companies, real estate investment counsels, and other pros. You can take these charges as operating expenses as long as the costs are paid for work related to your rental activity.

Did You Know?

Were you aware that:

• Landlords can greatly increase the depreciation reductions they receive the initial few years they own rental property by using split depreciation.
• Well thought out planning can permit you to take, in a single year, the price of improvements to rental property that you would instead have to deduct over 27.5 years.
• You can rent out a vacation home tax free, in a few cases.
• Most tiny owners can take up to $25,000 in rental property losses each year.
• A special tax rule allows some landlords to take 100% of their rental property losses each year, regardless of how much.
• Folks who rent property to their family or pals can lose just about all of their tax reductions.

If you didn't know any of these facts, you might be paying far more tax than you need to. As usual, be certain to check with your tax advisor or tax professional.

[Author's note: View our new Better Business Bureau review.]

Marco Santarelli is an investor, author and founder of Norada Real Estate Investments — a nationwide real estate investment firm providing turnkey investment property in growth markets around the United States. For more articles like Top Ten Tax Deductions for Landlords, please visit our Real Estate Investing Blog where it was originally published.

Top 10 Tax Deductions For Owners is a post from: WiredWriter

Rental income is a huge factor for many pre construction real estate investors. The truth is that once the condo or townhouse is built and they can rent it out for more money than they pay a month is very appealing. Think about How to finance an investment property, if you receive one month money in rental income and you only pay for your mortgage and upkeep and your house is skyrocketing in value. Is that a good investment? Since pre construction investment real estate is so sought after developers are demanding a higher percent for down payment. Often time’s developers want about ten to twenty percent of the property sale price as a down payment, as well, just to hold your spot with a reservation.

Forming a relationship with an experienced management firm such as Phoenix investment property ensures that you get the best location to set up your dream property. Moreover, private market real estate concern about the question How to finance an investment property has high purchase costs and sale costs. In terms of purchase, there are real estate agent connected commissions, lawyers’ fees, engineers’ fees, and many other costs that, with a real estate investment advice, add the purchase price beyond the price the seller receives.  

Tips For Buying Commercial Property As Investment Real Estate is a post from: WiredWriter