How To Lower Financial Costs
Like a lot of landlords, you’ve probably set up escrow, so mortgage, insurance and taxes come out of your account every month. You probably don’t think much about them, but trust us, finding ways to lower any of the three can have a huge impact on your monthly expenses as a real estate investor.

In particular, landlords and real estate investors often ignore the control they can exercise over financing expenses. From the taxes you pay to the government to the interest you pay to the bank; you can lower financing expenses from your properties.

Take Advantage of All Tax Breaks
Most people rarely look forward to doing their taxes. But for savvy real estate investors who understand the power of depreciation and other tax advantages, tax season can be fun. Many property owners are able to lower their personal tax bill by so much that they get money back from the IRS, and what’s more fun than that?

We could record a whole video series on taxes for real estate investors (plenty of people already have), but we’ll keep the overview light here. Just know that, along with rental cash flow, amortization, and appreciation, tax savings are one of the big four wealth generators a rental property offers an investor. Because it’s so powerful, it’s worth trusting an expert. We strongly advise that you hire a CPA to handle your rental property related tax filing. That being said, you’ll maximize your savings if you’re in the know yourself. Here’s some of the info you should become familiar with:

1) You’re a Business, Not an Investor
2) The AllPowerful Operating Expense
3) De Minimis Clause


A few other smaller items to keep in mind in preparation of tax season:

Consider the Home Office Exclusion – this is a tax deduction that allows you to deduct, as business expenses, the costs associated with working out of a home office. This deduction is only available if your rental activities qualify as a business (another reason to ensure that’s the case!), you use your home office exclusively for your rental business, and you use it on a regular basis.

Track ALL Expenses – This includes any purchases you make, any miles you drive, or any other costs you can possibly record. This will prove useful for two very important reasons: In the hands of a good CPA, it will ensure you minimize your tax bill and maximize your rental property profit and will protect you in the case of an audit.

Challenge Your Property Tax Assessment
Every state has property taxes, but the percentage depends on your municipality. Regardless, it’s money out of your pocket based on the value of your property. If you have a property that has been assessed at a low value in comparison to other nearby homes, you’ll enjoy nice tax savings. If the value is higher than the norm, you’ll end up paying more.

If you’re successful in changing the opinion of your local county tax assessor, you could enjoy hundreds or even thousands of dollars in savings. Although, if they’ve got a fair value already, you may end up wasting your time.

Refinance
Patience is one of the most valuable assets you can have as a real estate investor, and it’s not limited to buying and selling properties. When you own a property, you can always refinance to get a lower interest rate on your mortgage.

Thanks for watching, and happy renting!

About Innago
Innago is a free, easy to use online property management software designed for landlords and property managers of all sizes.
Innago allows you to create applications, screen tenants, sign leases, collect rent, manage work orders, organize financials, communicate with tenants, and much more.
Our mission is to make renting simple, accessible, and affordable for landlords of any size. Too many property management applications are overwhelming, bloated with unnecessary features that drive up the cost and turn their software solution into a software problem. From day one, we've met and collaborated with landlords of all sizes to produce software that is free, effective, and efficient.

Start Managing Rentals Better. For Free. https://innago.com/

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