The IRS has introduced a safe harbor that makes things easier for landlords when it comes to claiming deductions

Here’s a bit of good news for small landlords: The Internal Revenue Service has introduced a “safe harbor” for deducting repairs to investment properties from ordinary income. Normally, the IRS does not allow you to take a full current-year deduction for anything they consider a renovation or improvement. They only allow you to take a first-year deduction on repairs, which the IRS defines as projects that do not materially add to the value of a property . . .

Read more about The Safe Harbor for Landlords

{ 1 comment }

With tax time on the horizon, here are some tips on depreciation for real estate investors

Depreciation is a double-edged sword. It’s a big part of why real estate works so well with leverage as an investment. Taking the depreciation allowance on investment property is a critical part of the attractiveness of real estate investing, from the point of view of the cash-flow investor. But the rules governing depreciation are notoriously baffling, and occasionally trip up even tax professionals. . . .

Read more about Real Estate Depreciation Tips

{ 1 comment }

There are pros and cons for homebuyers to consider before purchasing a vacation home

Whether you love tropical beachcombing or hitting the powder on a ski slope, if you find yourself vacationing in the same locale year after year, you may have considered purchasing a vacation home there. If not, perhaps you should. Like many things in life, there are advantages and disadvantages to owning a second home, and like any investment, buying a vacation home requires taking stock of your finances and your plans for the future. . . .

Read more about The Pros and Cons of a Vacation Home

{ 0 comments }

If you

In any kind of investing, making money is only half the battle. You must also expend considerable effort, time and capital on protecting your gains and making sure they aren’t stripped away from you, whether by an act of God, a criminal act on someone else’s part, or just random misfortune. After all, every successful football team has to have at least a competent defensive unit. . . .

Read more about Insurance Considerations for Real Estate Investors

{ 2 comments }

Real estate investors may wonder which is better, renting or flipping properties, but the answer depends on each investor

If you’ve been reading this column for a while, you know the first commandment of the flippin’ insider: Buy at a discount. This is good advice because it preserves your options: If you can buy at a discount, you not only have every advantage going into a flip, but you’ll have a much easier time renting it out for more than you are paying out in mortgage, interest, maintenance and taxes. It’s simply much easier to create a cash-flow positive property . . .

Read more about Flipping vs. Renting

{ 9 comments }

Yale economist Robert Shiller has found that houses are not guaranteed to appreciate in value

Although the recent housing bubble and subsequent burst may have jaded some, the vast majority of homeowners and investors (and the real estate agents who sold them those houses) believe that house values appreciate over the long haul. What you’re about to discover may surprise you. . . .

Read more about Real Estate Values

{ 4 comments }

Investing in real estate can be lucrative, but it takes time and a lot of money

Everyone seems to know it. It’s on TV, it’s in the newspapers, and it’s on the radio: Real estate investing can do wonders for your financial future! However, just because investing in real estate has a great reputation for delivering stellar returns and building great wealth doesn’t mean that all investments are created equal. . . .

Read more about Investment Property Considerations

{ 22 comments }

Financing real estate investments with retirement money can be risky, but in some cases it might make sense to tap into your 401(k)

The stock market’s gone nowhere for years. Interest rates on bonds and mortgages alike are hovering near their record lows. With the more traditional asset classes going nowhere, it’s very tempting to look elsewhere for investment returns. And compared to a few years ago, real estate is on sale. Let’s take a look at some of your options when it comes to using 401(k) assets for real estate investing. . . .

Read more about Using 401(k) Assets for Real Estate Investing

{ 24 comments }

This week

This week’s Tax Corner question comes to us from Rick Chase, who posted the question in a column on the taxation of real estate flipping: “I am new to real estate investing and recently purchased rental properties held by two separate LLCs. One of the LLCs is held in a self-directed IRA, and the other LLC is not held in an IRA. My question is not about taxation of . . .

Read more about Depreciation on Investment Properties

{ 1 comment }

Real estate investors can prepare for an IRS audit, and save money on taxes, by keeping accurate business records

It wasn’t raining when Noah built the ark. Likewise, you shouldn’t be waiting until you get an audit notice to get your paperwork together, gather receipts, dot your i’s and cross your t’s. Understand that the federal government is hungry for money just now. For all the talk of recovery (how many “recovery summers” are we at just now?), tax revenues . . .

Read more about Audits of Real Estate Professionals

{ 4 comments }