The Tax Benefits of Purchasing a Duplex or Multi-Family Real Estate - Owner Occupied in San Diego

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3 Major Tax Benefits of a living in Duplex With Owner-Occupancy

Now, while there are many many perks to doing this, one of them being that your tenant will be paying down most likely a significant chunk of your mortgage payment, there are also a number of tax benefits that will help cover the costs of home ownership & maintenance.

Now first off I’m not a CPA so you should absolutely fact check with your CPA or accountant on any of the 3 major tax benefits I’m going to discuss.

1) Optimal Financing: A Duplex essentially gives you the best of both worlds. You get to take advantage of the preferential financing that comes w/ an owner occupied property, rather than being classified as a 2nd home, a vacation property, or an investment property, and not getting as good of a rate on your mortgage
2) Depreciation: Since the other half is acting as a rental you can depreciate the rented half of the property. This is a process that lets you take purchase price of the building, subtract the land value, and then you’re going to divide that # in half (since you’d be living in one of the units) and then divide by 27.5 years to get the annual depreciation write off. 27.5 years is how long the IRS considers a buildings life to be.
So here’s a quick hypothetical example. $600k duplex, lets say in Logan Heights. You’ll subtract the $150K worth of land to get $450K. Now, split that number in half to get $225K because you’re living in one of the units yourself, and you can depreciate $225K and then write off a little over $8K for the next 27 years.

3) Operating Expense Write-offs: While you have to report the income you earn from your duplex, you can deduct all your operating expenses. This means any management fees, any advertising you do, and necessary repairs.

Now The benefits aren’t limited to simply these three, and they will differ if you aren’t living in the unit yourself. Some better, some worse. And there are a few other benefits we didn’t discuss such as Passive Activity Losses & Capital Gains Shelter.

House Hacking, or Purchasing and living in an owner-occupied duplex or small multifamily is perhaps one of the best ways to launch your investing career and start building your portfolio, especially in San Diego where buy and hold investments favor value adds and appreciation.

To top it off, A lot of these properties are located inside of Opportunity Zones, a topic I covered on a previous video, where you’ll experience even more tax benefits.

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Maxwell Ventura
Discher Group of Douglas Elliman - DRE# 02082438
950 Sixth Ave STE 212, San Diego, CA 92101
Phone: 619.944.2580
Email: maxwell@dischergroup.com

Видео The Tax Benefits of Purchasing a Duplex or Multi-Family Real Estate - Owner Occupied in San Diego канала Maxwell Ventura