16 Savings Every Real Estate Investor Should Take Advantage of

Analyzing a good real estate deal is a key skill for your ROI as a real estate investor, but the savvy choices don’t end there if you want to find financial success. Savings can be found through thoughtful tax choices, property upgrades, and general planning. If you are hoping to boost your financial gains through your investments, don’t miss these helpful savings options.

Whether you are looking to invest in your first fix-it-and-flip-it or are a seasoned investor trying to expand your real estate portfolio, every penny counts. Here are 16 ways you can save money on your real estate investment.

1. Deduct Mortgage Interest

The rules governing mortgage interest deductions have fluctuated in recent years. As of April 2025, mortgage interest is fully deductible as a business expense. Although there is a cap on the amount of mortgage interest you can deduct on personal property, rental properties have no such cap. Deducting the interest you pay on mortgages for rental or real estate investment properties can significantly reduce your tax burden. 

2. Deduct Depreciation

The IRS assigns a “useful life” period to income-producing properties. This is a period of 27.5 years for residential properties or 39 years for commercial properties over which normal wear and tear might reduce the property’s value — even if the market heats up and the property appreciates. Claim this annual depreciation of the structure only, not the land upon which it sits.

3. Enjoy Bonus Depreciation 

The passage of Donald Trump’s tax bill reinstates 100% of first-year “bonus depreciation” for some types of commercial real property. The rules surrounding depreciation can be complicated, so check with your tax advisor or accountant to ensure an investment you are considering is eligible.

4. Get The Benefits Of A 1031 Exchange 

When you sell an investment property, you must pay capital gains tax on the profit. Defer this penalty by reinvesting the proceeds from your sale in another like-kind property, which means another investment property must replace the investment property you sell. You cannot do a 1031 exchange on a flip or a personal residence.

5. Keep Track Of All Expenses

At the beginning of your real estate investment career, you may not be making or spending enough to itemize your deductions. Still, it’s good to get into the practice of tracking all your expenses, even if it takes a while to exceed your standard deduction. The list of what’s deductible is long and includes everything from real estate agent commission to office supplies, advertising, repairs, and utilities.

6. Segregate Costs

New investors looking to earn more money fast to expand their investments might want to break rental properties into distinct components, such as appliances, fixtures, etc. Instead of spreading out depreciation costs over time, this allows for faster write-offs and savings on your annual tax bill from the start.

7. Appeal Your Assessment

The only time you want a big number on your property tax assessment is when it’s time to sell. Otherwise, take the time to challenge and appeal your property tax assessment to lower your annual tax bill. 

8. Take Advantage Of Energy Credits

Although some popular tax credits for energy-efficient home improvements will expire in 2026, some states and localities still offer incentives or rebates for installing energy-efficient HVAC systems, windows, solar panels, or insulation. Not only is an energy-efficient build or update better for the planet, but it may also save you some money at tax time. 

9. Properly Structure Your Business

The current self-employment tax rate is 15.3%. This means any profit you make on your investment is taxed at this rate. Protect yourself from self-employment taxes and save money by organizing your business into an LLC or S-Corp. These tax structures can save you thousands of dollars and also limit your personal liability.

10. Deduct Your Home Office

You don’t need to rent office space to take advantage of an office space deduction. If you are managing your properties from home or conducting business in a dedicated space, the IRS allows you to deduct a portion of your rent or mortgage, utilities, and internet. You can itemize this expense or take a standard home office deduction, which the IRS will calculate for you. 

11. Track Your Travel

Many travel expenses associated with conducting business are deductible. This includes expenses such as mileage, lodging, and meals for trips related to managing or inspecting your real estate investments. 

12. Write Off Your Insurance Premiums

Your real estate portfolio represents a considerable monetary investment. It makes sense to protect it with landlord insurance, liability policies, and umbrella insurance related to all your properties. Fortunately, these premiums can be written off annually. 

13. Hire A Professional

First-time real estate investors may attempt to do it all themselves, using free legal forms and inexpensive tax software to protect themselves and file annually with the government. If money is tight, this might make sense initially, but the expertise of attorneys, accountants, appraisers, inspectors, and consultants is invaluable in the long run. These professionals can help you protect your portfolio, and their fees are tax-deductible business expenses. 

14. Use The Right Tools

You might be tempted to fill your investment property with the first tenant who applies, but take a moment to reconsider. In the worst-case scenario, signing a lease with the wrong tenant can lead to thousands of dollars in lost rental income and additional eviction expenses. Tenant screening tools that verify credit scores and check criminal backgrounds can be lifesavers because they weed out bad actors and identify the most reliable tenants.

Taking time to screen tenants carefully saves money by reducing tenant turnover and mitigating income loss. Some localities require improvements to the property between tenants, too, and the fewer times a property turns over, the lower the bill for these repairs will be.

15 Don’t Ignore Incentives

You don’t have to be a large-scale investor purchasing multimillion-dollar properties to take advantage of state and local incentives. Research available grants, fee waivers, low-interest loan programs, and tax incentives offered by cities and states. Some of these incentives come with restrictions, such as requiring funds to be used to rehab low-income areas of the city, develop more affordable housing, or restore historic districts. Others are open-ended and focus on bringing improvements to the area overall.

16. Look Before You Leap

It saves money in the short and long term to take your time before deciding your next real estate investment. Talk with your financial advisors and consider your personal goals before buying your next property. If you want to get a good deal, consider working with an agent who offers home buyer rebates, helping you lower upfront costs and potentially boost your overall return.