Multifamily Syndication Advantage. Let’s talk about tax advantages.
Of course the requisite disclaimer here. I am not a CPA nor an attorney. I’m just sharing some of my experiences with you. I strongly encourage you to seek the advice of your CPA and your counsel, as anybody should rightly do.
Okay, I was in my CPA’s office many years ago, kind of at the start of my real estate investing career. We were sitting down, going over the financials. Going over that years tax returns, and my CPA looks up at me, and he says, “Devin, you need more rentals. Looking at this whole picture here. You need to put more rentals in your portfolio here.” Why was that? Well, because at the time it was just rental houses and now you know I’ve since moved up to multifamily syndication’s over the years. But, there are some similarities between the two, we’ll just lump into one category call, rental real estate as an investment.
When you have rental real estate as an investment you’re going to have depreciation which means every year you’ve got a little bit of a loss on the that building. In multifamily you have something called accelerated depreciation. Which is certainly beyond the scope of this short video but accelerated depreciation is really one of these magic things that you can do in the realm of multifamily syndication to help with your tax return in terms of paying less taxes.
Huge advantage being able to do that. Especially if you’re a high wage earner. You’re a doctor. You’re an attorney, you’ve got a high W2 income. And you’re paying in that upper tax bracket. Investing in an apartment complex can be a great way to help reduce that. Again, please see your CPA to learn more about that, but, we do have tax advantages from investing in multifamily syndication’s, via depreciation. We’ve also got something called a 1031 exchange, which might be a little more esoteric and yes it is slightly more complicated but, it’s still an advantage that the government offers to us to be able to take a profit from an investment and roll it into another like-kind real estate investment and defer taxes.
So, again I defer to my CPA for the details on this but for folks that are considering looking into a multifamily investment this is a massive, massive advantage. We all know, it’s not what you make it’s what you get to keep that really counts.