Buying Points, Insurance, and Tax Deductibles
Hi, Everyone!
I'm a new real estate investor. I'm in the process of buying my first rental property and I have a few questions about buying points and etc.
Property value is $200k and I'm putting 20% down. Location is in Texas.
I was given these rates for today:
3.437% is costing 1.875%- $3000- Principal/Interest: $713
4.125% is costing 1.25%- $2000- Principal/Interest: $775
4.75% is costing .125%- $200 - Principal/Interest: $835
Can someone help show me a formula on how to determine if it's worth to buy the points and how long should I keep the house for it to be worth it? My strategy for this property is to buy and hold due to its high appreciation potential. I'm also deliberating whether I should not buy the points so I can save more money to purchase my next property vs buying the points to improve the cash flow. But for now, I need advise on the calculation.
If I do buy the points now, will it be tax deductible?
For property taxes, is this also tax deductible?
Lastly, which company do you recommend for landlord/liability insurance?
Thank you.
Regards,
Jake