How Much To Set Aside For Taxes

2 Replies

I'm wanting to get started in real estate investing and I want to know how much I should plan to set aside each month for taxes. Is there a best way to calculate how much the taxes will be on rental income? I am looking at multifamily properties and I would be house hacking.

@Zachery Potts - Congrats and welcome to the Real Estate game!   Keep reading, learning and asking questions and you'll be successful.

This is a great question and I'm glad you are thinking about taxes before starting your journey but it's a hard one to answer in a forum.  This answer is specific to your personal situation (income, marital status, withholding, and many many other variables.)  I'd recommend talking with a tax professional and booking a consult to talk about this particular question and any other questions you may have as you start your journey.

If you need help finding a tax pro, I'd look right here on BiggerPockets.  There are many experienced Real Estate tax professionals who know this specific niche, but are also investors themselves.

Best of luck!

@Zachery Potts

As @Jake Hottenrott pointed out, an accurate answer requires a case-by-case analysis.

However, as a rule of thumb, house hacking and being a passive investor in MF deals is unlikely to increase your taxes, so no prepayment is necessary. Just remember that this is a rule of thumb, and our thumbs are different.