What are the tax benefits of multifamily real estate?
Description: A summary of the tax benefits of investing in multifamily real estate
The tax benefits are ASTOUNDING, is what they are.
I won’t bore you with a descent into technical tax jargon like depreciation or cost segregation or anything else. Rather, I’ll put it to you like this:
It’s frequently the case that, when an investor participates in a multifamily project, that they can take a year-1 tax deduction for a substantial percentage – and sometimes 100% of their investment amount.
Now understand what that can mean… if you get to take a tax deduction for the entire amount of your investment, you’re basically investing with pre-tax money… it’s as if you’re getting the benefit of using an IRA or 401k, but without having to use an IRA or 401k.
Honestly, the tax advantages alone can be enough reason for some higher-income investors to participate in this asset class. And the best news is that you don’t have to take anybody’s word for it. You can, in nearly every case, have your own CPA or tax advisor confirm what your tax benefits will be BEFORE you commit your capital to a project. In that way, the tax benefits are almost like a guaranteed return to you.