The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: arun gera who wrote (67483)	11/29/2006 5:30:19 AM
From: Tradelite	Read Replies (2) of 306849

<<In Central NJ area a $400,000 townhouse rents for only $2000/month.>> You might get a $400K-$600K townhouse for approximately that same rent level around where I live. But how you make out under the tax laws depends on whether you're a tenant or the landlord. Property taxes in NJ are higher than we have around here, I believe, and can probably be tax-deducted by the landlord. But you have to look at the landlord's entire tax return to find out how he's making out on that deal. What is his equity and monthly cash flow in the property? What is his personal tax bracket? What does he get to deduct from fed and state taxes in order to keep owning the property? What is he spending for maintenance and upkeep and/or HOA dues, the latter being a tax writeoff for an investor as a biz expense but not a tax writeoff for an occupant/owner. Also could be some other differences in federal vs. state/local tax rules that need to be examined. Real estate seldom lends itself to broad generalization, popular as that concept might be. Real estate can create full-time job opportunities for accountants and lawyers.

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