How to Lower Taxes by Buying Real Estate in Portland Oregon

Posted on: May 24, 2007

With tax time still fresh on your mind, you may be looking for ways to reduce the amount of income tax you pay each year. One of the best ways I have found is to own rental property. Why? Well, our “friendly” IRS allows landlords to deduct their annual mortgage interest expense and property depreciation. “I thought property appreciated?” you say. It does, but for business purposes assets are allow to “devalue” for replacement. For 27.5 years, the IRS allows you a tax deduction equal to a portion of the property’s value. The result can be a tax savings that might amount to thousands of dollars per year. In addition to lower taxes, you are building equity in real estate while your renter is paying down the principal on your loan. This is not just a theory; it is practical knowledge that is utilized every day.

Many people, including yours truly, have purchased rentals; and, I have realized the landlord tax benefits. Are there down-sides? Yes, you must maintain the property, and you might have tenant problems. There are risks in just about any investment you pursue. In my experience, the benefits greatly exceed the problems.

Before you take that step to acquire a rental property I would urge you to seek advice from a tax expert. Should you decide to invest in real estate choose an experienced professional realtor who can help you to make a wise, rental purchase.

Article written by Mel Hamilton, Broker for portlandrealestate.com