Did you know there are two different types of tax states? It’s true. About 50% of the states are tax lien states, and the other half are tax deed states. States like California and Texas are deed states while Arizona and Florida are lien states.
So what’s the difference? A tax lien state is one where lien is filed on a property by the local jurisdiction for failure to pay the property taxes. So if you’re an investor who ends up buying that lien, you do not own the property. Instead, you only have a lien on the property and you’re waiting for the owner to pay the taxes that are past due. With this you receive interest or any other penalties which can end up being a nice rate of return on your investment. Continue reading Real Estate Tax Liens and Tax Deeds
The tax advantages of real estate are staggering. You can own a rental unit, collect rent, pay operating expenses and loan payments, and come out with a positive cash flow, and then still get a tax break. When you own rental real estate, or even if you just buy and sell properties, you are classified as being self employed. You are also allowed to deduct operating expenses, which further reduces your income for tax purposes.
Been self-employed is one of the greatest tax savings tools that exist. You are able to shift a lot of your regular living expenses into the area of legitimate tax deductions. Of course, along with the advantages of preferred tax treatment, appreciation, and leverage, there is also monthly income that can be made, using a few simple methods of buying, renting, managing, and selling.