Summary: If you ever feel the dreaded tax stress, this blog is for you! Learn why apartment syndication offers the besssst tax benefits, and how to start living that stress-less lifestyle.
Did you know that more people become millionaires through real estate investing than any other path? Aaaand multifamily apartment syndication is the best real estate investment around!
Yes we’re a little biased…but we still stand by our love for apartment syndication. 😍😍
Here’s the truth. If you’re genuinely looking to grow your wealth and create a solid financial future, apartment investing really is an excellent choice. One of many, many reasons why, is that there are certain tax laws that actually benefit investors.
Because there’s nothing worse than feeling totally excited about the money you’re earning, and then being slammed with a giant tax bill.
Thaaaat’s the worst. 😕😕
But apartment syndication investors are considered producers in the economy, which means they create things that make the world better. The government 🧡💛 LOVES people who contribute to things like jobs and housing (basic human needs), so there are tax incentives and benefits for producers.
Huge tax savings are basically a reward for stimulating the economy. But of course, not all investing is rewarded in the same way.
Investing in stocks, for example, might offer you a low tax rate, but there aren’t any special benefits on top of that. Stock market investors are categorized as consumers when it comes to tax law – just like many other ways of earning income.
But stick with us, AKA the Kitti Sisters!
Because we’re about to tell you the 4 ways apartment syndication can help you get the MOST tax savings possible, and make your tax stress a thing of the past. 🙌
Here’s a peek at what’s up today:
- Now is the best time to get into apartment investing.
- Depreciation should be your new BFF.
- Passive investors get alllll the same benefits as active investors.
- Very wealthy people have been legally cutting taxes forever.
1️⃣ Now is the best time to get into apartment investing
Getting rewarded for being producers in the economy is not exactly new. Smart, wealthy producers have been enjoying tax benefits for a longgggg time!
But there are some reasons why right now is the best time to start becoming a producer through apartment syndication.
Why, you ask?
One main reason is that the world has been a little crazy as of late. The whole Pandemic situation pretty much sent the economy into a tailspin, and producers of any kind became sparse. When there are only consumers, but nothing to consume…well, you understand how that can be pretty bad, right?
So, as we continue to rebuild from the chaos, the government is even more interested in people who invest in assets that create things – liiike housing! 🏘️
Now, you might be wondering if it’s a good idea to start investing in the aftermath of such uncertain times, but listen. We were able to close our biggest apartment syndication deal EVER this year. And that was a deal we started back in the height of uncertainty. We are living proof that apartment investing can thrive even in the most uncertain times.
People will always have needs, no matter what’s going on in the world. Right now the economy is rebuilding and apartment syndication puts you in the action of producing something people need. Thus, giving you a chance to receive those awesome tax perks. 👌
2️⃣ Depreciation should be your new BFF
Alright. We can’t discuss saving money in taxes without mentioning a personal fave topic of ours…depreciation!
Yes. It is totally worth the hype. 😏😏
Depreciation lets you write off the value of an asset over time – like the normal wear and tear that happens to apartment buildings. Every year, investors get a form called the K1, which indicates a paper loss for the year of investing.
Now, we know the word “loss” sounds like a negative, but honestly, it’s nothing but gains! As in, you gain a huge advantage over other investors.
There are three types of depreciation to know about:
- Bonus depreciation
- Straight line depreciation
- Accelerated depreciation
Bonus depreciation happens when, over time, even though an apartment building goes up in value, you’re able to still deduct for depreciation. It basically creates a phantom deduction that offsets all that cash flow you have coming in. It is amaaaazing.
Straight-line depreciation is when the government sees what improvements have been made on the land. Obviously you won’t be renting out a pile of dirt…so anything added to Mother Nature (buildings, pools, parking lots) contributes to the depreciation deductions.
Accelerated depreciation refers to the depreciation of smaller things like appliances, light fixtures, carpets, etc. For this one, you definitely want to hire someone to crunch the numbers and do a cost segregation study. But it all adds up to offset your yields for each property.
So, you see why we loooove us some depreciation, right? This stuff right here can change everything when it comes time for taxes.
3️⃣ Passive investors get alllll the same benefits as active investors
On to our third way apartment syndication helps you save. There are different ways to invest in real estate, but apartment syndication is where you get to be a totally passive investor.
That means you could be sitting back, drinking Mai Tais, and dozing off on a beach in the sun…while your money works for you to generate more wealth. The best part of that is, you still get the same tax benefits as the people who are dealing with all the tenant issues and making all the fancy business plans!
The owners of the property get what’s called a “pass through entity,” which means any incentives will pass through them and trickle down to you.
The active investors (deal sponsors) do the behind-the-scenes work, and you literally reap the benefits.
The passive income AND tax benefits. 🤩🤩
We’re big fans of the win-win scenarios. And for real, apartment syndication creates LOTS of wins for us and so many other smart investors.
4️⃣ Very wealthy people have been legally cutting taxes forever
Apartment syndication is a great way to become wealthy, but there’s also a reason why people who are already wealthy choose this option.
You see, passive investing is perfect for those who are doing other things and working other careers. And wealthy people know how to take full advantage of the write offs in apartment syndication.
They use the deductions from investing to help decrease their other taxable incomes.
It’s honestly like magic. ✨
If you ever wonder why millionaires and billionaires seem to owe little or nothing in taxes…well, this is it‼️
They simply know how to use apartment syndication and real estate investing to lower their overall tax bill.
Sooo, do you have to have millions in the bank before getting these sweet tax benefits?
No way! 😘😘
You can get involved in apartment syndication now (the sooner the better, actually). By becoming a passive investor, you don’t have to do anything to earn yourself some tax relief. You just invest, and let your money do the rest!
After you put your money to work, you hand that K1 form to your accountant, and voila! Let the government reward you for being the awesome producer that you are.
While your money helps create housing, clean energy, and even jobs, you could be sitting on that beautiful beach. Apartment syndication offers you tax breaks, passive income, and the FREEDOM to live life on your own terms. 🙌
GET ME ON THE KITTI FREEDOM CLUB
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