9 Tax-Saving Tips for First-Time Real Estate Investors

Have you recently decided to get into real estate investing? If you’re still pretty new to this whole world, there is probably a lot you are yet to learn. One important aspect you should not overlook is taxes. However, not all is grim as it may sound. There are also ways to save on taxes, so keep on reading for some tips that any first-time real estate investor can use when it comes to cutting down on these expenses.

Organize everything

No matter how much you try to save on taxes, you will still have to pay them. To make the whole endeavor easier, it’s good to get organized on time. When tax season arrives, you should know exactly where all the documents are. Moreover, you should also set up a space for yourself where you will have enough room to go through everything and make the filing process efficient.

Use digital tools

Something else that can help you stay organized and on top of everything is all sorts of digital tools. This way, you will not have to deal with tons of disorganized documents and receipts. Software programs like Mint, Evernote, and MileIQ can all help you with your bookkeeping as well as allow you to categorize your expenses and make note of certain things. Going digital can save you plenty of time and money and make the whole process a bit less stressful.

Turn to an accountant

For a smooth experience, you should also think about hiring a certified public accountant. These experts are trained to handle all sorts of tax assignments, including real estate investments. In addition to that, they can also offer investment planning and acquisition services. Look for someone that specializes in this field and rest assured that they will use all the newest technology and practices to ensure you file your taxes correctly and save money.

Keep a record of your expenses

You are probably aware that you are eligible for some tax deduction as a real estate investor. That being said, you need to keep a record of every expense in order to make the most of these deductions. Make sure you track everything you do and file all records of fees, commissions, advertisements, insurance, vehicle maintenance, and so on. If you do this right, you will see a big difference once tax season comes around. Additionally, accountants tend to charge less if all your records are well-organized.

Track travel and entertainment costs

Among the expenses you need to track, you cannot disregard travel and entertainment costs. As a property manager and landlord, you will get a chance to deduct all travel expenses associated with lease signings, property viewings, and maintenance. Real estate conferences are also covered, which includes everything from your accommodation to airfare fees. These are actually seen as entertainment costs, for which you also get write-offs. However, check if your business is eligible for these advantages and make sure you keep all your receipts.

Learn more about depreciation

A strategy you could use to save money on taxes is depreciation. This means that you can deduct a certain percentage off your property’s value each year that it’s in your ownership. Moreover, capital improvements such as new roofing can also be depreciated. This can all sound a bit confusing to first-time real estate investors, which is why looking for professional help is always a good move. For example, if you’re located in Queensland, you can find a reliable quantity surveyor in Brisbane to assist you with the whole process. It should also be said that you might have to pay depreciation recapture taxes if you ever sell the property.

Invest in more passive income properties

Depreciation is also very beneficial when you have several properties. So, to save money in the long-term, investing in a passive income property is a great course of action. Not only will you have a steady cash flow if you decide to rent, but you will also have tax deductions. 

Separate your short- and long-term investments

Even if you’re a first-time investor, you might have decided to start with a few different properties. Before you begin handling your taxes, you want to separate your short- and long-term investments. The short ones typically include flipping, prehabbing, and wholesaling while long-term investments are when you buy and hold a property. This is essential as different tax rates are applied to different types of investments. Your accountant should be able to sort this out for you.

Go green

Finally, you cannot overlook the importance of going green. By installing eco-friendly features, you will get some tax breaks. For instance, if you use solar water heaters or solar panels, you can see a deduction in your taxes. However, keep in mind that these are not as abundant as they used to be and might even become less available. Nonetheless, you will be saving money in the long run.


If you’ve decided to start investing in real estate, you have plenty to learn. However, with these tips, doing your taxes and saving some money will be easier.