Are you a landlord who is considering residential property management in Atlanta ? There are many benefits of owning rental properties, one of which is the tax benefit. Tenants rarely get any tax benefit from paying rent, but the tax systems in almost every state greatly favor landlords. In fact, real estate has more tax benefits available than many other types of investments.
Mortgage interest and real estate taxes will likely be your biggest deductible expenses, but there are plenty more that you can take advantage of. You can also deduct all operating expenses related to your rental properties and your rental company, from maintenance costs and utilities to travel expenses, employee salaries, and office supplies. You are also able to deduct the cost of your insurance premiums and legal services. You can also get back the expense of your real estate investment through depreciation, or making a tax deduction for part of the cost of the property over several years.
If you end up selling a property that you have owned for at least a year, the federal tax rate of the sale cannot exceed 20%. The appreciation of your rental property will not be taxed until you sell, and you can access a tax-free portion of the appreciation prior to selling by refinancing the property or taking out a second mortgage on it.
Even tax losses result in deductions for landlords. If your property produces a tax loss that is offset by passive income, you can deduct for that loss. Additionally, there are greater tax benefits for owners of rental properties who are considered active managers. If you vet your tenants via tenant screening practices like background checks and credit checks, you may qualify as an active manager. Active managers can deduct up to $25,000 in losses.