One downside of primarily investing rental in Bay Area is cash flow. Your cash flow is low to negative and because of the depreciation, you don’t normally have to pay tax on your low cash flow.
With new Qualified Business Income (20% off on net investment income), I felt like it is a waste of opportunity not to utilize it. I am wondering on whether it is time to mix in more cash flow properties to take advantage of this. What are you tricks on making use of this QBI opportunities?
If you paid more than $50K in taxes, I would be able to help you with a tax loophole on the books. 10% of your gross income can be put aside for emergencies. But if you aren’t, sorry, you are small fish to me.
You might consider investing in nearby areas that offer better cash flow potential. You could also check out properties with multiple units to get more income sources.
