Best Tax Strategy: Max out 401K or Save for Real Estate?
Hi!
I am looking at real estate investing to reduce my tax liability and generate passive income. I have a 401K plan which I have been maxing out annually. My company matches 4% of the first 6% contributed. I have used the loan feature on my 401K to purchase my first investment property. Due to the 401K plan rules, I only have access to about 26K more. For my next move, I will need about $35K between repairs, closing costs and down payment.
I also have about $20K left on a vehicle loan.
Should I keep maxing out my 401K to get the max tax savings against my day job income or should I cut back to 6% and use the extra cash to pay off the vehicle loan and bridge the funding gap on second property?
Thanks for reading this!
-
Real Estate Agent Tennessee (#358817)
- Smokies STR Sherpa