Buying at Tax Deed auction can be a cheap and effective way of acquiring Rental Income properties. Rental Income guarantees steady returns, while still allowing you to hold the asset for future sale. Given the current state and trend of the market, there has never been a better time to own a Rental Income property, and we’ll detail the reasons behind that.
With the passage of the recent tax bill, taxes on pass-through income have dropped significantly – in some cases to almost half. Whether you own the property under your own name, an LLC, or a trust (see our last post on the benefits of these entities here!), rental property income qualifies for this low tax rate, providing that the property is separate from your primary residence.
The tax bill only furthers the benefits to landlords by increasing the individual standard deduction. This allows renters to achieve a higher tax return, reducing the allure of tax benefits of home ownership vs. renting. Less incentive to purchase a home means that rental properties will see a larger and more willing audience, when they’re available.
Of course, this doesn’t mean bad news for the sale of the property. The housing market is currently seeing home prices rise as availability becomes more and more scarce. When it is time to sell your property, you’ll likely see a market with ample pricing available. As purchasers begin to save more with the above-mentioned standard deduction, history shows that down payments will increase and need for strict appraisals will begin to decrease.
The new bill even allows for more deductions from money spent on improving these rental income properties, meaning you can invest a little now, and see the returns steadily come in, while still taking advantage of these generous tax deductions.
Once you’ve purchased your property at tax deed auction, don’t hesitate to give us a call. We’ll clear any conditions relating to the tax deed sale in 20 days, meaning you can have the place ready for renters and steady, record income in record time.
At Cleartosell, we are continually developing unique ways to save tax deed investors both time and money. Visit our Cleartosell YouTube channel to see our principal attorney address related topics of interest in our ongoing educational video series: Tax Deed Law Made Simple.
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Matthew Murray March 28, 2018