Investing in Real Estate for tax purposes

I heard someone say that investing in Real Estate for Tax purposes is a bad reason to invest in real estate. I always thought it was a good second reason, first being you want to make money of course. Any thoughts?


It’s just the “icing on the cake”…never invest just for tax advantage.

You get:

Capital Appreciation
Cash Flow
Then, tax advantages…


If I was a multi millionaire I wouldn’t be interested in purchasing properties to make money. My main concern would be sheltering the money in an investment that will continually keep up with inflation, hopefully.

It all depends on what your situation is.

Money is like a ball game. You have offense and defense. Offense is making money and defense is trying to keep money. Just like any other game, you can lose the game by not playing adequate defense, but you can’t win the game unless you play offense very well. You will never find a multi-millionaire that is not offensive minded. You out earn the tax man, you don’t hide from him. You never place money in places that won’t perform in an effort to hid it from the tax man. For instance if you put your money in real estate, you make money by cash flow which is tax free because it is shielded from the tax man by depreciation. You make money through the equity in the property which you take out by refinancing the property and taking the excess cash out. This money is spendable cash and since it is a loan it is tax free, you make money when you sell it by doing a 1031. In other words, you never do anything in real estate that does not make you money because the whole darn thing is tax free. So you never invest in real estate except to make money. If you want to loose money so the tax man will leave you alone, buy a laundromat…

perhaps one of the best business quotes I’ve seen is the following:

a taxation authority is nothing more than an uninvited business partner