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Do you pay income tax on the rental income as well? This would add about %30-45 to your mortgage payment breakeven as well, no? If your mortgage payment is $10
by motohagiography 8y ago
Do you pay income tax on the rental income as well? This would add about %30-45 to your mortgage payment breakeven as well, no?
If your mortgage payment is $1000/mo, you need that in after-tax dollars in addition to gap months and maintenance.
This pushes rents up for single property landlords in the top marginal rate, or am I missing something.
- jnwatson 8y agoYou only pay income tax on your net profit (in the US at least).
- motohagiography 8y agoNet expenses, but the equity in the property seems like income (as you can tell iana landlord). Income taxes likely contribute a significant percentage of the difference between mortgage payments an rent prices. For a REIT, this is different, but for an individual owner renting out a second property and paying income taxes on the rent income, would this not create a significant difference?