AirBNB, VRBO and many other online platforms have made it easy for homeowners to market their properties and generate significant revenue. So much so that,
“Home rentals have outperformed hotels in 27 global markets since the onset of Covid-19”
New York Times Sep 24,2020
Generating wealth from passive income is just the tip of the iceberg. Have you thought about reducing your overall taxable income? That right! Here’s how most homeowners take advantage of reducing their overall tax burden.
“You can depreciate most types of tangible property (except land), such as buildings, machinery, vehicles, furniture, and equipment”
According to the IRS, the “useful life” of a rental property is 27.5 years. This means that as a homeowner you will be able to distribute the depreciation deduction across the “useful life” of the property. As a result, you will be able to benefit from a “lower taxable income” for many years.
Similar to the depreciation of the building, if the restoration or betterment of a building is necessary, then these costs may be depreciated and lower the overall taxable income.
According to the IRS, this type of expense is treated differently than repair and maintenance expenses.
Worried about the cost of other people’s mistakes or general wear and tear? Don’t be! This is why it’s important to have an excellent property manager because these expenses count as deductions for the current tax year. It’s a win win!
Some owners can deduct up to 20% of their net rental income from their taxable income. Some key deductions include:
“Data from the most recent HPES shows that home prices are expected to increase by 18.2% over the next 5 years. The bulls of the group predict home prices to rise by 27.4%, while the more cautious bears predict an appreciation of 8.3%”
“Orlando’s annual median home price for 2020 ($265,000) was 9.1% higher than the 2019 annual median price ($243,000)”
Home away from home
Escape all the pressures of life
but feel like you’re still right at home!
No more excuses. Always have a destination.
To CELEBRATE, create long-lasting memories, leave a legacy and so much more…
“Long-term studies have shown a connection between vacations and heart health… women who took very few vacations… were twice as likely to have a heart attack or coronary death than women who had a couple of breaks each year…and men who took fewer vacations were much more likely to die from coronary heart disease than men who took more vacations”
Relax, Recharge and Get Inspired!
Due to COVID-19, there has been significant investment interest. As a courtesy, we would like to remind you to consult with your financial advisor or attorney about any specific advantages and benefits that may pertain to you.