Why property taxes rise on your investment properties (and what to do about it)

Sometime in March, county appraisal districts across Texas have an epic party. There’s loud music, dancing, cake, party hats and party horns. Oh and they send out the new property tax appraisals to property owners. Coincidentally, around the same time of the year, I receive numerous calls and text messages from clients. “Ouch”, “Getting killed over here” and “This is out of control” are some sentences that may be uttered. I’m trying to make light of it, but truth be told ever increasing tax … [Read more...]

Observations on income taxes on your free and clear investment portfolio

Many of the articles I have written on InvestingArchitect.com have originated from discussions with investors like you. A few months back, Robert - a regular reader and "subscriber" to our Blueprint strategy - made the following observation. One thing I have noticed though is that the income taxes I am paying keep increasing as the properties are paid off. Typically when you have a leveraged property the cash flow is completely tax sheltered by the depreciation. When the property is free clear … [Read more...]

How is income from investment real estate taxed?

Investment real estate gets preferential tax treatment from the IRS -one that is not afforded to any other asset class. In a nutshell, if you hold real estate long term, you are allowed to deduct a "paper" expense called depreciation from an appreciating asset. It's yet another way that real estate makes you money by letting you keep more of it after it goes through the government strainer. But in speaking with many investors (aspiring or active) there seems to be this gross misconception that … [Read more...]