Guy reduced his W2 taxes by 99% with this trick... ⚖️

I hope you enjoyed the long weekend. Let’s save you some $ today…

• How one software engineer slashed taxes to nearly $0 using two investment properties

• Cashing out of real estate is expensive

• Mystery Property Listings... Do QR Signs Work?

• 🔥 Deal of the Day! 🔥: 3 bd | 2 ba | Spicewood, TX

How to Use Real Estate to Erase Your Tax Bill

When software engineer Michael Hyun earned about $300,000 in 2022, he realized just how much would get deducted for federal and California state taxes. Feeling the pinch, he began researching alternative ways to reduce his tax burden as a W-2 employee.

Already owning one investment property, Michael purchased another single-family rental house that same year. He utilized a strategy called bonus depreciation, which allows deductions on elements of a property that depreciate within 20 years - things like lighting, cabinets and flooring. Normally limited for W-2 earners, he qualified by filing jointly with his wife Eileen, a real estate agent who met IRS criteria as a "real estate professional."

In total, the bonus depreciations Michael claimed amounted to $389,000 in deductions, reducing his $422,509 household income down to a mere $6,341 in taxable income. His federal tax bill plummeted from around $135,000 to just $633.

Others can qualify too by renting out their property for an average of 7 days or less per guest, and materially participating in its management for 100+ hours. Non-real estate professionals using this "short term rental loophole" can deduct in the same manner. Converting to long-term later is possible, but rapid sales after big deductions may incur repayment obligations.

With strategic property investments, targeted tax reductions are achievable for many filers. Review your status to leverage available incentives. (Full story on Business Insider)

Costs consume huge chunks of profit when selling a home

On a typical sale, real estate commissions claim the largest share, usually amounting to 5-6% of the total sales price. On a $450,000 home, that equates to $22,500-27,000 off the top. Additional closing costs add up in a hurry as well, including title insurance fees, legal fees, transfer taxes, and more. Don't forget pro-rated property taxes and any outstanding mortgage balance owed – those come directly out of the seller's proceeds too. Performing renovations and staging can certainly maximize the appeal and eventual sale price, but also exhibits diminishing financial returns, so consult an agent before spending too much.

Alternative sale methods like for-sale-by-owner listings and instant all-cash offers can reduce fees, though often at the expense of losing far more money on the eventual net sale amount. On a $450,000 sale with a $290,000 outstanding mortgage, expect over $325,000 in total sales costs. But net proceeds in excess of $100,000 still puts most sellers well ahead of their original purchase position. Finding an agent who can maximize sale price while minimizing costs proves invaluable to preserve equity gains. Thoroughly interview several candidates to find an optimal match with your financial savings goals and risk tolerance around the home sale process.

Aussie agents deploy mystifying signs with only a QR code - but does it work?

In an effort to capture attention in a competitive landscape, some innovative Australian real estate agents have implemented an unconventional marketing approach – property signs displaying just a QR code and no listing details. The trend has taken hold among certain agencies in recent months, intended to intrigue prospective buyers and renters enough to scan for more information.

Melbourne-based Casey Estate Agents began utilizing these cryptic codes around 6 months ago. The signs link to online listings when scanned, revealing full property information. Reactions have spanned from fascination at the novel tactic to frustration around lack of accessibility. With no images or contact information provided, those unable to scan while driving or living with disabilities get excluded from learning more.

Proponents highlight that the approach brings sharpened focus on the property itself first and foremost, rather than the listing agent or agency brand. But others argue the loss of photos and contacts on the signs reduces overall effectiveness. While conversion rates are reportedly similar so far, the jury is still out on whether this experiment will ultimately pay dividends.

As businesses across industries accelerate adoption of contactless technology like QR codes for health and convenience, real estate has been slower to embrace such innovations. But willingness exists to pilot new ideas, even if risks around accessibility accompany them. Should even moderate gains arise from cryptic sign codes, expect more agents to follow suit with limited downside in play. But marketers should still ensure traditional access channels remain available as augmentation, not outright replacement.

🔥 Deal of the Day! 🔥

Address: 3310 S Pace Bend Rd, Spicewood, TX 78669

This waterfront property combines breathtaking views, luxurious amenities, and a successful short-term rental history, offering a fully furnished retreat with modern comforts, outdoor relaxation spaces, and over 100+ glowing 5-star reviews, making it an ideal, income-generating vacation rental.

Airdna data:

Estimated monthly payment: $5,524/month (if financed)

Estimated monthly revenue: $4,716/month

Cashflow excludes additional operating expenses. Always confirm local regulations, HOAs and permits before purchasing a property.

Stay tuned for more keys tomorrow! Have a nice Tuesday. 🙏