Tax Benefits and Deductions
One example of the tax benefits is that the cash flow that your rental property generates is tax-free. In addition, when property investors decide to sell investment properties and reinvest the profits, they are not required to pay the capital gains tax.
As for tax deductions, owning a rental property enables property investors to deduct almost all expenses related to their investment such as real estate property taxes, mortgage interests, insurance, and operation expenses. Being able to deduct from these expenses ultimately increases the real estate investor’s profits and overall return on investment. Exactly how much you can deduct depends on your rental income and local real estate laws in the housing market in which you’re investing.