Landlords soon realize there are more advantages owning investment property than perhaps first thought. Yes, the rent tenants pay should cover not just the mortgage payment but enough to cover annual property taxes, insurance and maintenance and management costs in addition to a positive monthlytax deductions for real estate investors cash flow.

But once the first year has passed and the property owner hands over the records to the accountant in order to file income taxes, there are significant income tax advantages owning rental properties. Your situation will be different and this is not to be construed as tax advice, that’s for your tax professional, but the facts are there are more benefits than just the cash flow.

If you’re a passive real estate investor, one who isn’t actively running the real estate business on a daily basis but seeing monthly deposits go into your bank account, you have income tax deductions but only up to $25,000 of expenses again rental income and even then these deductions can be phased out as you make more money. Still, that’s $25,000 as a deduction is a pleasant surprise. Yet another reason why real estate investors who buy their first property are anxious to buy their next.

Common tax deductions for rental properties include any expense that is considered reasonable to manage the asset. When you take trips to the property for any real estate related reason, those trips are deductible. Insurance premiums are also tax deductible, and so are repairs to the property and depreciation. Mortgage interest, property management fees, property taxes, maintenance costs and other direct expenses tallied during the process of managing the asset. You can’t deduct your property insurance or maintenance costs on your primary residence but you can on a rental property. If you have more questions about income taxes and investment properties, set up a meeting with your tax account and add up what you can subtract.