An investment property owner is recognized as a business owner and with that comes a list of great incentives. There are advantages to those willing to find the right property and create an environment to attract paying tenants.
First: It is income producing. Whether it is a single family home, duplex/ triplex, commercial or mixed use commercial/ residential there is potential for financial returns. Owning the property outright eliminates the mortgage payment and is a great goal that can be part of a financial retirement strategy. Especially in Nevada County and Placer County.
Second: Equity building. Asset appreciation that is often associated with owning real property can even yield great protection over time against inflation (as opposed to money in a bank) and has generally proven to appreciate in value over time. Ex. A $400,000 home today can appreciate in market value where as the same amount of money in a bank account could lose value because of dollar inflation over the same amount of time.
Third: Tax advantages. The tax code is written for entrenauppanship and incentivizing you to invest in the economy. Investment property owners could claim aspects on their taxes such as: the interest on your mortgage loan, depreciation ( this is an incredible tax advantage), repair expenses, local or long distance travel to visit the property, a home office as a business expense (computer, printer…), employees wages such as contractors or staff, casualty losses, utilities and insurance costs. Even professional or legal services such as Property Management company expenses can be claimed. For tax advice always find a great accountant familiar with real estate and your individual circumstances. Hopefully this gives you a reason to ask your tax professional how well this could work for you!
As business owners we are incentivized to help the broader economy, improve our neighborhoods and generate employment. Nevada City, Grass Valley, Auburn and the Sierra Foothills are emerging markets due to the quality of the lifestyle!
Enjoy the returns!
John Boyer
