I am officially real-estate investor now. Woo-hoo! I bought 3-unit building in San Antonio, TX.
Selling price was $125K. I put 25% down, the rest is financed @ 4.5% (30 years, fixed).
All three units are rented out for $550 each (slightly below market). Obviously I have property management which costs me 10% of rent.
Figures are:
$1650 - rent
$165 - management fee
$60-$100 - water bill
$770 - mortgage payment (including property tax and insurance)
So on good month cash flow is $600-$650
The plan is install high-efficiency shower heads, and raise rent by $30-$50 in the end of the leases.
The thing I have very vague understanding is how taxes work. My questions are:
1. What can I write off (besides property repairs, management fees, property taxes, mortgage interest)?
2. Is this income subject to my home state income tax (property in TX with no state income tax, but I live in CA)?
3. Any other tips and tricks? :)
Many thanks in advance! I'm so-o-o excited! :D