Why Rental Properties Are Great To Have!

As an Investor if you have a home in which you have lived in for two of the last five years, then this is great news which you will now be allowed to sell your home and take the profit tax free “up to $250,000 being single or $500,000 if you are married”. With that said, you are able to now take those proceeds and reinvest in another area and more than likely double and may even triple the rental income cap and / or yield rate.

This equity that you would now have can be used to invest in real estate, and taken the advice above if you did invest the proceeds of your home sale in a rental property you now will be able to depreciate the property, versus an owner-occupied property which you are not able to. For Example if you have $475,000 structure on a 27.5% year flat line depreciation, then it would equal a write off of $17,272.00 per year. With this said Investment property owners are able to write off operating expenses from one-time or routine maitenance and much more. Some will argue that it’s not a better option than living in your own home as owner-occupied due to the fact that you are not able to write off the mortgage interest and taxes as the standard deduction. However the bonus is that when tax season comes around you are all to write off mortgage interest without the $750,000 cap that you would typically get from an owner-occupied property, which you can write off all of your local property taxes without looking at a cap. Most will also take advantage of the 1031 Exchange for their investment property and defer the entire gain even if it exceeds the $500,000 for married couples or the $250,000 for single individuals. Also do not forget the ability to use a pass-through entity like an LLC which an investor can find themselves in a lower tax bracket than they would as an individual.

There are always Pro’s & Con’s to everything, so here are a few that you may want to look at.

Being a tenant:

There is flexibility due to the fact, you can call your landlord at anytime for any repairs that are needed and not having to worry about the out of pocket cost, and once your lease ends you are able to pick up and move. However, this does mean that the landlord can also give you notice to vacant when they need to or if they want to sell it, along with restrictions on painting walls etc. Though come the end of the year, depending on what your monthly rental rate is you have given thousands of your dollars to an investor and lined their pockets and you will never get any of that money back.

Being an Investor:

If you rather not be hands on and hire a property manager for the property then you will have to pay a 6-10% on average for the property manager which can eat into your profits. Also if your tenants do not pay rent you hav to deal with collecting the monies and or evictions etc, though you have all the other benefits we have previously discussed.

Other things to consider:

Before you start investing, its always recommended to consult your CPA and or attorney on how to set your business up for partnerships and or LLC’s etc as well as go over your tax brackets and monies because each scenario is different for each person.

If you have any questions or want guidance in your investment career contact our DFW Elite Living Team at or via phone at 469.912.0499, were here to help.

Joseph Garcia

Joseph Garcia is a proud native Texan, born in Lubbock, raised in San Antonio and loving Dallas. Everyday Joseph uses his more than 16 years experience in the Real Estate industry to help better serve his clients. Joseph started his career in Property Management, Apartment Locating, and Leasing, then quickly transitioned into becoming a full-time residential agent in 2007. Today, Joseph continues to focus on Residential sales and with his broad knowledge base can even assist his clients with Commercial deals.

Joseph is dedicated to helping individuals and families find their dream home and more importantly, the lifestyle they desire! What clients love about Joseph the most is his passion for life and​ ​outgoing personality. When it comes to marketing and selling homes "JoJo Sells" uses the power of Social Media to move homes quickly.

​Joseph also prides himself in making sure each deal gets to the closing table​ no matter how difficult the deal is​. He also goes above and beyond to ensure his clients find the perfect home match whether it's personal or investment. Joseph's extensive network of Real Estate professionals in Sales, Leasing, Lending, Home Inspection, Home Repair and Title make every transaction as seamless as possible.

Joseph carries the distinguished Certified Luxury Home Marketing Specialist (CLHMS) Designation from the Institute for Luxury Home Marketing and a Global Elite Certification which provides access to a Global Real Estate Network.

Joseph completed the Metrotex Leadership Academy class of 24 and immediately after served as a ROC to mentor the Medical / Sports day of class 25. In 2015 he partnered with 5 other individuals to create and serve as the Marketing Chair for the Non-Profit Gay And Lesbian Organization of Real Estate (GALORE) to address unique Real Estate issues facing the Gay and Lesbian community. Joseph is also a member of the National Association of Hispanic Real Estate Professionals (NAHREP), as well as Young Professionals Network (YPN) & Metrotex Leadership Alumni.

He currently services as the Sales Director in the VIVO Uptown office and every day shares his vast Real Estate experience by coaching and mentoring new agents. When you're working with Joseph, you're working with not only a fun agent, but one of the best!

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