Tax Deduction: 6 Real Estate Tax Deductions For Investors

Lidiya at USA Pavillon

Tax Deduction 6 Real Estate Tax Deductions For Investors
Owning a piece of investment real estate can be a great way to build long-term wealth and interim cash flow. As an additional financial benefit, there are many tax benefits that come to those that own investment real estate. There are six real estate tax deductions in particular that could be used to save a lot of money. 


One significant tax deduction available is depreciation. When you own investment real estate, about four percent of the acquisition price can be deducted from the cash flow of the property every year. This can greatly offset any income that you have received throughout the year. However this will also reduce your cost basis, which will affect your tax liability when the property is sold.

Probate Costs

Real estate investors can also save money on taxes related to probate costs. Buying a property through probate is a great way to get an investment at a cheaper price. However, there are some expenses that come with it. When working with a service such as, you will need to pay a commission, which is deductible. You will also need to pay some legal costs, which can also be deducted.

Maintenance and Management

As a real estate investor, you will also be able to deduct all of your maintenance and management costs. Most real estate owners will spend hundreds of dollars every year completing routine repairs to their property and others could spend up to ten percent of their income hiring a management company. All of these expenses related to the maintenance and management of your property can be deducted.

Leasing and Marketing

When owning investment real estate, you will have to spend some money leasing and marketing the property every year. All money that you spend on trying to fill up a vacancy can be deducted from your income taxes. This can include advertisements and leasing commissions.

Real Estate Taxes

Any money that you pay for real estate or other property-related taxes can also be deducted. This can also include any money that you spend on late fees or interest or any costs associated with appealing your property tax bill.


When you own a real estate investment property, you will need a significant amount of insurance to protect the property, your tenant, any visitors, and even the fixtures inside the property. Since you will have less control of who comes in and out of the property, it would be wise to have a sufficient amount of coverage. While this can be expensive, it is completely deductible.
In conclusion, owning investment real estate can be a great way to build long-term wealth and interim cash flow. An additional financial benefit is that it can also come with some significant tax benefits to the property owner.

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