How to Maximize Tax Efficiency of Your Rental Properties

How to Maximize Tax Efficiency of Your Rental Properties

If you own rental properties and want to get more income out of them, there are multiple ways to do just that. One way to do that is to maximize tax efficiency. Specifically, you can maximize the tax efficiency of your rental properties by doing several different things.

Maximize Tax Efficiency: Live in the Properties for Two Years

By making the property your primary residence for two years, you can get tax benefits. Living in the property for at least two years means you qualify for up to the first $250,000 (if you are single) or $500,000 (if you are married) of capital gains tax-free. Moving around that much can be a hassle, but it is also a way to earn money without having to pay the normal taxes on it. In addition, while you are living in one of your rental properties, you can also make improvements to the property and upgrade the home, thus increasing its value.

Put Them in an LLC

You should put your rental properties in an LLC in order to separate them from your personal finances. This will allow you to limit your personal liability, separate your rental properties from each other, and get the benefit of pass-through taxation, as well as easily separate your personal expenses from your business expenses.

Any landlord is capable of creating an LLC, and you can do so before or after purchasing your rental property or properties. If you choose to create an LLC, make sure you register it and be aware that there are some expenses that will accompany registration. An LLC will usually require state and sometimes local fees to register.

Maximize Tax Efficiency: Maximize Your Deductions

When you invest in real estate, you have the opportunity to deduct many expenses from your taxes. Some expenses you can deduct include mortgage interest, insurance, property taxes, maintenance costs, property management fees, advertising expenses, legal fees, closing costs, home office costs, travel expenses, depreciation, and more. Make sure you are taking advantage of the tax deduction possibilities you have as a landlord; you don’t want to miss out on possible ways to minimize your taxes.

As someone who owns rental properties, you have many opportunities for maximizing the tax efficiency of your properties. Take full advantage of those benefits by making the most of them. Live in your properties for two years in order to be exempt from capital gains taxes, put your properties into an LLC, and maximize your tax deductions.

Looking for a new rental property? Check out our listings!

 Steelbridge Realty LLC  is a Licensed Real Estate Brokerage that utilizes cutting-edge marketing techniques and data-driven Real Estate solutions in today’s ever-changing environment. Our group of professionals have decades of experience and have navigated through many business cycles. Our diverse background gives us the tools to guide people towards successful decisions.

 



 

$3,400,000
Single Family Home For Sale
Active
4
BED
6
TOTAL BATHS
5,800
SQFT
1226 Miracle Ln
Fort Myers, FL 33901
BECKLERS RIVERSIDE ADD Subdivision
$1,750,000
Single Family Home For Sale
Active
5
BED
6
TOTAL BATHS
5,740
SQFT
3560 Stuart Ct
Fort Myers, FL 33901
STUART SUBDIVISION Subdivision
New Listing - 3 days online
$689,500
Single Family Home For Sale
Pending With Contingencies
4
BED
3
TOTAL BATHS
2,419
SQFT
1222 Caloosa Dr
Fort Myers, FL 33901
RIVERSIDE Subdivision
$3,800,000
Single Family Home For Sale
Active
6
BED
8
TOTAL BATHS
8,600
SQFT
1210 Gasparilla Dr
Fort Myers, FL 33901
YORK MANOR - FORT MYERS Subdivision
$579,000
Single Family Home For Sale
Active
3
BED
3
TOTAL BATHS
2,006
SQFT
1235 Osceola Dr
Fort Myers, FL 33901
RIVERSIDE Subdivision
$15,950,000
Single Family Home For Sale
Active
6
BED
11
TOTAL BATHS
10,493
SQFT
1240 Coconut Dr
Fort Myers, FL 33901
PALM GARDENS Subdivision
$469,900
Single Family Home For Sale
Pending With Contingencies
3
BED
2
TOTAL BATHS
2,315
SQFT
1230 Braman Ave
Fort Myers, FL 33901
FORT MYERS Subdivision
$799,999
Single Family Home For Sale
Active
4
BED
3
TOTAL BATHS
3,564
SQFT
1307 Plumosa Dr
Fort Myers, FL 33901
RIVERSIDE Subdivision
$799,000
Single Family Home For Sale
Active
5
BED
4
TOTAL BATHS
4,320
SQFT
1254 Braman Ave
Fort Myers, FL 33901
BECKLERS RIVERSIDE ADD Subdivision
$799,900
Single Family Home For Sale
Active
4
BED
4
TOTAL BATHS
4,347
SQFT
1323 Florida Ave
Fort Myers, FL 33901
YORK MANOR Subdivision
$299,999
Land For Sale
Active
0.44
ACRES
LEE
COUNTY
1312 Bougainvillea St
Fort Myers, FL 33901
RIVERSIDE Subdivision
Price Change - 2 weeks ago
$649,000
Single Family Home For Sale
Active
3
BED
3
TOTAL BATHS
3,030
SQFT
1225 Wales Dr
Fort Myers, FL 33901
BURTWOOD Subdivision
New Listing - 6 days online
$499,000
Single Family Home For Sale
Pending With Contingencies
4
BED
2
TOTAL BATHS
2,747
SQFT
1300 Shadow Ln
Fort Myers, FL 33901
COUNTRY CLUB ESTATES Subdivision
$1,425,000
Single Family Home For Sale
Pending With Contingencies
4
BED
4
TOTAL BATHS
3,228
SQFT
2924 Valencia Way
Fort Myers, FL 33901
VALENCIA TERRACE Subdivision
$695,000
Single Family Home For Sale
Pending With Contingencies
5
BED
4
TOTAL BATHS
3,684
SQFT
1320 Alcazar Ave
Fort Myers, FL 33901
VALENCIA TERRACE Subdivision
$1,395,000
Single Family Home For Sale
Active
4
BED
4
TOTAL BATHS
3,952
SQFT
1126 Tipton Ct
Fort Myers, FL 33901
FORT MYERS Subdivision
New Listing - 3 weeks online
$274,850
Single Family Home For Sale
Pending
3
BED
3
TOTAL BATHS
1,907
SQFT
1239 Sunbury Dr
Fort Myers, FL 33901
LA CHELLE MANOR Subdivision
New Listing - 4 weeks online
$2,199,000
Single Family Home For Sale
Pending With Contingencies
4
BED
6
TOTAL BATHS
5,127
SQFT
1130 Tipton Ct
Fort Myers, FL 33901
FORT MYERS Subdivision
New Listing - 2 days online
$825,000
Single Family Home For Sale
Active
4
BED
4
TOTAL BATHS
3,404
SQFT
1354 Almeria Ave
Fort Myers, FL 33901
VALENCIA TERRACE Subdivision
New Listing - 3 weeks online
$825,000
Single Family Home For Sale
Active
6
BED
6
TOTAL BATHS
4,286
SQFT
3706 Oxford St
Fort Myers, FL 33901
BURTWOOD Subdivision

 

re: Why Your Next Move Should Be Planned Well in Advance

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