Considering Multi-family Real Estate Investments in 2019?
A New Year is quickly approaching, what are your plans for Multi-family Real Estate Investments?
Multi-family Real Estate Investing can be a great way to generate passive income and build equity. Many choose to invest in Real Estate for several different reasons, income, retirement, and tax benefits just to name a few. Real estate investments can also be less volatile than the stock market and generate a steady monthly income. What better time to get started than now! Winter months are the perfect time to purchase that rental property and have it ready to go for leasing season.
Preparing for a Purchase
There are several things to consider when taking on the role of a first time multi-family property owner. Will you be managing the property yourself, or hiring a management company? What type of budget do you have for upkeep & repairs? How much do you charge for rent? Are the units currently rented? Being a landlord is a full-time job! Do your research, choose a property with potential, look at the financials (NOI, repairs, vacancy) from previous years. Also, keep in mind that there will be unforeseen repairs and expenses.
There are 4 important pieces to the puzzle-
- Cash flow
- Tax Benefits
Taking these four things into consideration will ultimately help you understand what type of return you can expect to see from your investment!
There are several different Tax Benefits that can be taken advantage of as an Investment Property owner.
As a landlord there are at least 8 property tax deductions that can accompany these types of investments-
- Depreciation (non-cash expense) deduction from income. This real estate tax deduction is based on the perceived decrease in the value of the real estate.
- Mortgage interest tax deductions from income. A mortgage interest tax deduction is the interest you took for your mortgage loan and this real estate tax deduction is usually your biggest one. Also, remember to deduct your mortgage insurance premium if you took one out.
- Deferral of capital gains via 1031 exchange
- Cost of repairs, maintenance, and upkeep
- Cost of services (rental property management & legal consultation or services)
- Travel costs associated with the property (checking on the property, inspection, repairs, etc). You can even deduct real estate taxes for the gas you used on your rental property visits.
- Property tax deductions
How Root Realty can Assist you
Root Realty specializes in Chicago Multi-family Real Estate. Not only can we help you buy and sell property, we can also help you manage property and upgrade existing property as well.
Our Brokers focus solely on Multi-family and Commercial properties so they have the expertise to guide you through your purchase or sale.
We would be happy to meet with you in person to discuss your options and provide an estimate of your property’s value.
If you own property and need assistance with managing it our team of Professional Property Managers is here to help as well.
Root’s property managers & leasing agents strive to make owning a rental property as easy as possible.
If you are ready to make your investment in Real Estate in 2019 we’ve got you covered!