When contemplating the purchase of real estate, particularly in high-priced areas such as Manhattan, buyers often forget one useful way to boost their cash flow.
The omission pivots on how much of a tax benefit they can expect after filing their returns.
If cash flow is a consideration, there is no reason for a home buyer to wait for that refund to arrive in the mail or bank account from the benefits of paying property taxes and mortgage interest (don’t forget points).
A self-employed individual can reduce estimated tax payments by dividing the anticipated refund into quarters and subtracting the result from each of four payments.
Similarly, a business’s employee can increase the number of deductions to reduce the funds withheld from each check.
Remembering the extra cash that can be available regularly is an excellent tactic for a buyer to stretch perhaps farther than originally believed. Not only is the technique perfectly legal. It’s perfect in every way.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022