Ready, Set, Invest! Your Guide to Buying Your First Investment Property

By Sharon Wagner

Investing in real estate is undoubtedly one of the smartest ways to boost your earnings and create wealth. With the potential for significant returns on investment, whether you're looking for an extra source of income or a path to becoming a full-time investor, purchasing your first investment property is a major undertaking. To help you make the most out of your investment, The Real Estate Think Tank has compiled some essential steps to follow when purchasing and managing your first investment property. 

Taxes, Taxes, Taxes

This may be stating the obvious, but the tax consequences of a real estate transaction are one of the most important aspects of the deal. Although most generic measures of property value, such as cap rate and NOI seek to exclude taxation in order to generate values that can be comparable across investors, an individualized tax assessment of any real estate acquisition is essential to determining its true rate of return of and its opportunity costs.

Although I am not a tax professional, tax expert or tax adviser, I would like to briefly discuss various real estate investment tax considerations. I will attempt to address a few of the more popular tax considerations at the property, entity and security level: