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Week of Dec. 17th-Republican tax plan poised to benefit landlords

December 17, 2017

While regular homeowners may be worrying that the Republican tax plan will raise their monthly costs, investors in single-family rental homes see the proposal as a potential boon to business. 

In fact, just the prospect of the plan, which is still being negotiated on Capitol Hill, has more small investors rushing in.

Unlike owner-occupants, investors in single-family homes can write off all the expenses of owning and running a rental because the properties are considered a business. The vast majority of individual investors use mortgages on the properties. Fannie Mae and Freddie Mac allow up to 10 investor loans per person. 

The interest on those mortgages, along with repair and management costs, are deducted from the income the property produces. Investors are only taxed on that income, so by reducing it, the investment acts as a tax shelter. None of that would change under the Republican tax proposal.  Read more.



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