Calculating taxable income reductions into a deal?

Question

Hi. One reason I am exploring investing in real estate rentals out of state (I’m in CA) is to offset realtor commissions. Please correct me if I am wrong, but it’s my understanding paper loses from a rental can reduce your overall taxable income.

My question is, do you use this while analyzing a deal? Would a deal that breaks even or has a slight negative cash flow make sense in this situation?

The true goal is gaining equity and appreciation. Cash flow is secondary, but I do want the investment self sustaining. I was just wondering if I should be looking into markets like Austin or Sacramento (where I could elimjnate the buyer side commission!)

Thanks!

Ashish Acharya · Answer

People dont tend to factor in tax saving but we have clients who have collected/saved more than 5 years' worth of cash flow from first year tax saving because of real estate. Tax saving is not the only factor you should consider but it can definitely make a huge difference in your cash flow/investment strategy.

Calculating taxable income reductions into a deal?

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