Tax Tips for Maximizing Net Returns for NY Property Investors

Blog April 21, 2016 By Admin

How can NY property investors maximize their net returns by minimizing taxes?


Savvy and experienced individuals investing in the NY property market understand that there can be a huge difference between gross and true net investment returns. In markets like New York taxes can make all the difference in positive net returns. So how can you drive down those taxes so that you keep more of what should be investment gains?


Understand the Huge Role Taxes Play

The most sophisticated investors and advisors put tax considerations first when contemplating any investments. It is that important. If you have been dismissing taxes then now is the time to figure out how much you’ve been needlessly throwing away on them. That’s not just how much you’ve been burning in each individual year, but the lost compounding gains on that money too.


Get an Awesome Team of Tax Experts

Mastering the ever changing tax laws, staying ahead of them, claiming the breaks in a way which can be defended from audits, and having the time to do it is more than a full time job. It’s far more profitable to hire expert accountants, attorneys, and tax preparers than to attempt it yourself. Have them review your back income taxes for savings, and get a great bookkeeping system.


Settle Back Taxes

Delinquent and back taxes can be a big risk for investors. They can lead to liens, garnishments, seizures, and foreclosure. Even before that stage they can kill credit, and mean forking out thousands in interest, not to mention the stress. Get help settling those bills at a discount while the IRS is hungry to do so. That will free up a lot of time and cash to invest more.


Reduce Your Property Taxes

Whether holding a sizable portfolio of NY property or making new acquisitions this year – always challenge your property taxes. That can add thousands of dollars to your bottom line each and every year. That means more spendable cash, more money to invest, and more attractive properties to future buyers.


Use Leverage

Using loans and lines of credit on investment properties and your own residences may entitle you to substantial tax breaks every year. This is the prime driver for many to use leverage, which also happens to boost gains and decrease risk via diversification and reduced exposure to loss.


Pass on Taxes to Tenants

From short term rentals through Airbnb to commercial leases, and seller held financing, there are many scenarios in which taxes are typically passed on directly to the end tenant or buyer. Use this where you can.


Create a Plan for the Year Ahead

Most people get crushed by taxes because they don’t really have a tax plan and strategy. That leads to massive mistakes, missing thousands in breaks they expected, and a ton of stress when it comes time to file taxes and pay bills. Work with your tax professionals to customize a plan for the whole year and you’ll be far ahead of the competition.