Rentals and write offs

[Joe Boggin]

I make 50k a year and my wife's makes almost 140k. Besides our primary home we don't have much to write off and we are getting murdered every year with taxes. We were going to get a couple rentals just for the write offs but don't fully understand how they help?! There are a couple turnkey homes for 35k that rent for 700 a month we were going to get one or two. This was advice given by a family friend...

[Account Closed]

Joe,

Congrats. You married well. Buying properties for $35k that can rent for $700/month will give you more tax liability because you're actually making money on those rentals. Ask me how I know.

Aside from contributing the maximum into your and your wife's 401k, buy a McMansion with a big mortgage if you want more tax write-off. There's no reason to buy negative cashflow properties because you need the write-offs. That's just financially retarded IMO.