The end of the year is quickly approaching, and that means that before you know it, it’ll be time to do those pesky taxes. As much as many of us put them off, it’s certainly worth the effort whenever there’s a tax return involved. As a real estate investor, they can be extra involving. Or if you’re an accountant, you might enjoy crunching numbers and doing your taxes. Assuming you don’t need the money right away for living expenses, etc., here’s some smart suggestions on what you may want to consider using your return for.
6 Things Real Estate Investors Can Do With Their Tax Return
1. Get Some Fiscal Freedom
Pay off some debt. Carrying around high-interest debt can be extremely burdensome. Double up on a mortgage payment and enjoy taking the following month off. Or maybe use it as part of a down payment on your next investment venture.
2. Peace of Mind
Having some extra cash on hand for the unexpected is a great way to help you sleep a little better at night. If your water heater bursts, a compressor on an AC unit goes out, or any number of things that could happen to your personal home or rental property, you’ll feel better when you have some cushion from a tax return.
3. Upgrade Money
There are several different options to add some updates to your personal home or investment property. Depending on the size of the return, you could do a lot or do a little, but either can go a long way. New light fixtures, ceiling fans, or even a fresh coat of paint can make a big difference.
4. Invest in Your Future
If you’re a real estate investor, this has already crossed your mind. But there are multiple ways to go about doing this. As mentioned above, you could use your tax return to go toward a down payment on a new investment property; but additionally if you don’t need to use that money quickly, you could turn return into even more money over the years with a 4-6% interest rate, especially if you’re investing that return each and every year.
5. Invest in Yourself
You could go a couple of different directions here. Clearly, you could enroll in some real estate classes, tuition, go on a retreat, join a professionals group, or even make your personal office look a bit cooler. But if you’ve been working yourself to the bone and you’re burned out, taking a vacation and recharging your batteries can potentially take you just as far. Either way you go, this could lead to more money and job stability.
Giving to a great cause – definitely one that you yourself care about - can deliver one of the best feelings when it comes to what to do with your tax refund. Everyone’s financial situation is different, we understand completely. Donations are generally – what? - Tax deductible. There are a lot of different variables that go into tax equations that can add to the money you get back from the taxes you’ve put in all year. Be sure to do your research or contact an accounting specialist to get your maximum refund.
At the end of the day, it is your refund, but there are several ways you can spend it to optimize its return.