Brooke Taylor AZ Realtor®

What to Know About Investing In Real Estate

Investing in Real Estate Series

Have you ever thought about owning an investment property? Then this series is for you!  I’m covering everything to know when it comes to investing in real estate, including the different options out there and how to make it happen.

You’ll also get a complete rundown on why investing in a rental property can boost your finances, the tax benefits, plus what you need to know about being a landlord, how you can best flip the right property for a profit, an investment strategy for move-up homeowners, and how you can save money when it comes time to sell an investment property.

If you’re finding yourself with some extra savings, looking to diversify your investment portfolio, or just want to create passive income, then it might be a good idea to take a closer look at what real estate can do for you and your finances.

In fact, there are several reasons why investing in real estate can help your finances in the short and long run. Plus, you can still keep your day job and let this “side business” help you prosper even more with some additional income! 

Take a look at what you can gain from an investment property:

Tax Benefits for Landlords

Many residential rental home expenses are tax deductible. That means you’ll have more money in your pocket despite the costs of running a rental property. Just remember to keep all receipts and ask your accountant about how you can maximize your tax benefits!

Those who make real estate investing their livelihood and their main source of income will find additional deductions and tax benefits for their properties. 

However, we’re focusing on those of you who want to do this on the side. Remember to consult with a professional tax consultant who specializes in real estate.

Here are few of the most popular deductions for part-time investors:

  • Deduct the costs associated with regular maintenance. This includes landscaping, pest control, cleaning, etc. That means you can also write off the costs of smoke detectors, HVAC filters, yard tools, professional services that help with maintenance and any other related costs for upkeep. Just remember that it’s anything non-repair related to keep the property functioning.
  • Deduct the costs for any home repairs or items that need to be fixed.  If the roof has a leak or an appliance has broken, you’ll know that you can deduct the payments for these repairs.
  • Deduct professional services that help with managing your property. As a landlord you’ll need services for accounting, legal work, marketing/advertising, taxes, and more. You can even write off the cost of running a credit report for potential tenants!
  • Deduct loan interest on a mortgage for a rental property. This is a biggie! You can even deduct the interest you pay on a credit card just used for your rental property for repairs or purchasing supplies.
  • Deduct travel expenses related to your property. Keep track of mileage for any travel you may have to take in order to maintain and repair your rental property. And airfare, gas, or hotel costs can be deducted too. Make sure you document this carefully for the IRS.
  • Deduct insurance premiums associated with your rental property. You’ll need to buy different types of insurance policies such as homeowners, fire, flood, mortgage, theft, and general liability. All premiums can be deducted.

Build Wealth Without Quitting Your Day Job

The big draw for investing in residential real estate is to make more money and build wealth without having to quit your day job. Right?!

Although just like everything in life, there are no guarantees, especially if you make a mistake (which can happen if you don’t have an expert agent on your side, hint, hint!).

Here are two ways a rental property can build wealth:

  • Others paying down your mortgage. Most likely you’ll have a mortgage on a rental property, and that’s where having tenants can offset the cost of that property’s monthly mortgage payments. If you do the math correctly and have a viable property, you’ll easily cover the mortgage costs and other expenses for your rental.. 
  • The rental becomes income producing. Again, if you do the math correctly, you should profit from a rental. You don’t want it to be a drain on your finances. In order to get some positive cash flow, you’ll need to take into account your expected rental income and subtract all of your expenses for the rental, including a vacancy and maintenance allowance. 

Today’s article is just the beginning of my six-part series on investing in real estate. Here are the topics this series will cover in the weeks ahead:

Buying a Rental Property 101 – This article willcover the different types of rental options—standard 12-month lease, vacation home, Airbnb or Vrbo type properties, and more. You’ll learn what you need to consider when buying a home you plan to rent out, including picking the right property, understanding the costs and return on investment expectations, and becoming familiar with financing requirements for non-primary residences.

What to Know About Being a Landlord – This article will review everything a landlord of a rental property is responsible for when it comes to finding tenants, maintenance of the property, deciding on whether to hire a property management company, and all the legal requirements such as local and state landlord-tenant laws and more.

Buying a Property to Fix and Sell — This article is perfect for those of you who want to flip properties for a profit. You’ll understand the ins and out of how you can find a “good deal” when it comes to buying a home, treading carefully when it comes to extreme fixer uppers, and working with an agent and lender so you don’t overpay and you get the financing you need.

A Move-Up Investment Strategy that Works – This article shares my favorite real estate investment strategy and you’ll see why! You’ll find out how you can buy a home and then move up to a new home while keeping your other home as a rental. It’s not for everyone but when it works, it’s an awesome way to make extra money on a home.

How to Save Money When You Sell an Investment Property – This article will go over what you need to know when you sell an investment property. It will cover 1031 exchanges, ways to defer taxes without using a 1031 exchange, and other strategies that will make it a smooth process for you.

I'm Brooke Taylor and I love helping first-time homebuyers and sellers make their real estate goals a reality. 
Let me know how I can help you make your real estate dreams come true!

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1307 E Southern Ave. #101
Mesa, AZ 85204



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schedule your free consultation

Hi, there!

I'm Brooke Taylor and I love helping first-time homebuyers and sellers make their real estate goal a reality. 

schedule your free consultation



Homeowner Info

All Articles

Let me know how I can help you make your real estate dreams come true!