[00:00:05] Speaker A: Welcome to the Short Term Show. The show about short term rentals and long term wealth with real property owners hosting real properties who are crushing it in the vacation and short term rental space.
And here's your host, Avery Carle.
[00:00:28] Speaker B: Hey, y'. All. Welcome back to another episode of the Short Term Show. I'm your host as always, Avery Carle. Today I have a really cool guest at Tax Boss, Anna. So, Anna Klein from Tax Boss, but that's who she is in my brain from following her on Instagram for a while. And we're here to talk about taxes, tax benefits, short term rentals, real estate, all of the above. How's it going, Anna? Good.
[00:00:51] Speaker C: Thanks, Avery, for having me. I really appreciate it. Super excited.
Yes.
[00:00:55] Speaker B: Thank you so much for coming on. Super happy to have you. And can you just give our listeners a brief introduction about who you are and what you do?
[00:01:03] Speaker C: Yeah, absolutely. So I am the CEO and owner of the Tax Boss. We're a virtual real estate CPA firm where we help real estate investors and business owners play the IRS game. That's my motto. And in the last two years, we have saved over $100 million to our clients. So it's amazing. That's what we do. I'm also a real estate investor.
No short term rentals yet long term rentals and mobile home parks. So that's also how I can definitely understand what the investor is going through because we. I do it also Love that love.
[00:01:33] Speaker B: I love somebody who practices what they preach. I just love a real estate investor. Anyway, so awesome. So a lot of our list, a lot of our listeners are going to be familiar with the short term rental tax advantage or strategy. I hate to call it a loophole because even though that's. It's not a loophole, it's just part of the tax code. But I feel like if all of us are using the word loophole all the time, then it's going to get scrutinized further.
So what do we call it? The tax advantage benefit strategy.
[00:02:01] Speaker C: What word would you use, Honestly? Tax law, because it's written in the tax code. So it's not really a loophole. Right.
[00:02:08] Speaker B: Short term tax law. Love.
Sounds so official too. So, all right, so a lot of our listeners are going to be very familiar with this, but in the event that maybe they happen upon this video on YouTube or this is their first podcast that they've listened to, can you give us kind of a brief overview of what the short term rental tax law is?
[00:02:29] Speaker C: Yeah, absolutely. So a lot of people who are high Net income earners who have a full time W2 understand and probably have this pain every single year that they pay a lot in taxes. Right. So if you're a full time W2 earner making over $300,000, you understand that there is essentially no tax strategies for those earners, for those for that type of income. So this tax law slash loophole is what allows high net income earners. And honestly anyone who's not a real estate professional, take depreciation, take losses against your W2 income. So the way that it works, and I explain it to people in very simple terms is buy a short term rental. Obviously you want to buy it not just for the tax benefits, you also want to buy that it makes sense as an investment. You take cost segregation and then you celebrate that depreciation. And now that it's 100% bonus and it's back, you're able to take those book losses against your W2 income which will then reduce your taxable income, saving you taxes. And the goal is for you to take those savings and continue your investment in short term rentals, commercial, whatever it is that you want to do your future with.
[00:03:37] Speaker B: Okay, that makes a lot of sense to me. Let's use like a million dollar property purchase example just to kind of put some ballpark numbers in front of people. So what are you looking at in terms of the benefit on your W2 taxes if you buy like for example a million dollar short term rental?
[00:03:55] Speaker C: Yeah, great. Let's take away the land too. Because every state is different. California has extremely high land. So let's just say you're in a normal state and your purchase price of your building is a million dollars, you're looking with a million dollar property to take. If we take bonus depreciation with cost segregation and course for the loss, you're looking at about a $400,000 actual tax write off on your income. So let's say you make $500,000 on your W2 working at, I don't know, Meta, if you buy a million dollar property, you're being able to wipe away essentially $400,000 of that. And that is very conservative.
The more improvements or you want to cost segregation is there, you might be able to wipe out the entire $500,000. So for the million dollar property, you're looking at a 350 to 400 actual loss just on depreciation. That does not include any other expenses that you have on that rental.
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[00:05:25] Speaker B: that is a lot of money. And guys, when we say write off, I'm. We mean reducing your taxable income by that amount. Not an actual, like, refund.
[00:05:36] Speaker C: Yes.
[00:05:37] Speaker B: Not a refund. Yeah, it's like the Seinfeld episode, which maybe I'm too old now, but writing it off. They're writing it off.
[00:05:44] Speaker C: They're just writing it off.
That's a great point, Avery, because when you think of that, it's not like you're getting your $400,000 back, right? But the way that it works is if you have a W2 of 500k and you're able to take $400,000 deduction, a deduction on that 400k. Now your taxable income, what you're going to be taxed on is only $100,000. And there's so much you can do even then by playing with maybe taking out some retirement. There's so many things you can do once your taxable income is that low.
Yes.
[00:06:15] Speaker B: The goal is keeping more of your money for longer.
[00:06:19] Speaker C: Absolutely.
[00:06:20] Speaker B: And the very next comment that I often get on when I post about the short term rental tax strategy is a bunch of people going, it's only in year one. It's only in year one. So, yes, it is only in year one. But what would be your response to that comment?
[00:06:37] Speaker C: Yeah, that gets thrown out a lot. Like, it's only in year one. Nobody talks about depreciation, recapture. And it's like, no, we talk about it. You're just not working with the right person. Right. But we talk about, I always tell my clients, the good, the bad and the ugly of buying a short term rental. Right. And of course, year one, it is perfection. Your tax return is going to look amazing and you might receive a really high refund. However, you want to make sure we plan all year round. Why? Because we want to make sure that if you do get a refund, how do we get to the next property? Right. We don't just want to play for today. We want to play for the future as well. And we want to make sure that you're not planning on selling this property next year.
If that were to happen because someone came in and gave you 10x above the selling price. Okay. Then we plan according to that. So the goal is, yes, it's only going to happen in year one. But how do we move on to year two, year three and year four?
[00:07:26] Speaker B: Right. And then the very next comment, the second most trolling comment that I get is you're not talking about the recapture, just like you said. Well, the goal is the intention when you start this should be to buy a property that makes money that's going to cash flow after year one. Once the tax benefits are over with and you've already taken those and that's done, you still need a property that is a good real estate investment that's going to make you money so that you're not having to worry about selling it and that recapture. And then you can do some things like 1031 exchanges to avoid that recapture. But the goal is not to trick people like oh, you can take this, you get this bonus depreciation the first year and then you can sell it later and then you're done. No, the goal is to buy a good investment, keep that property so that there's no reason to have to sell it later.
[00:08:18] Speaker C: Absolutely. Most people who don't who say that I think are just looking at the actual loophole and I think what you brought up earlier is true. That would be a loophole. Right. So that year one you get all these tax benefits and then you're trying to sell it in the second year. But the IRS is already like, don't worry, we got you, you can't trick us. So yes, there is depreciation recapture, but you're right, the goal is tax, tax strategy or what should I say? Taxes are like the cherry on top. You shouldn't just go buy a rental and a short term rental hoping that it does well, but you're going to get a huge refund and then planning on selling it next year. We saw a lot of that happen during 2020 where people got into the influx of Tennessee and just started buying rental properties and realizing that it's not passive. And you know that there is a lot of work that goes into a short term rental. So because of that the IRS is going to reward you with all of these benefits. But it's not like you just sit back and relax. You got to into this. Right? Right.
[00:09:12] Speaker B: Everything that is worth doing is some work. But you know, this is definitely better than digging ditches, so to speak. So it's easy work, it's easy to perform.
[00:09:22] Speaker C: Correct. Yeah. And it's something that creates wealth for the future of yourself and your family. So yeah, it's worth it.
[00:09:27] Speaker B: Totally agree.
Now let's Talk about really quick how you are. How, how do you execute this strategy? So we know, okay, I make over 200, $300,000 a year. I have a high tax bill. I need to buy a short term rental. I'm going to call a short term shop and buy a short term rental. But how do we execute past the. Okay, I know I'm going to buy one. I'm buying one now.
[00:09:50] Speaker C: What?
Yeah, so this is really important because IRS audits are extremely high when it comes to this strategy. It's not illegal. People are always like, well, I'm scared of an audit. And I joke with them and I say, well, unless you're money laundering or laundering money, like, there's no reason to be scared.
Going to be extremely expensive to go through an audit.
But what we do is we want to make sure we, we give you all the tools that in case of an audit, which we have successfully defended seven short term rental audits, by the way, in the last two years because it's pretty high.
So we want to make sure we give our clients and you and everyone the leads. Hey, you got to follow the rules. So number one is, let's say you decide to buy the short term rental. What you want to do is make sure that you materially participate in the rental. That is the number one thing that needs to happen. What that means is that you have to 100 hours more than anyone else, as you guys know, but you have to document it. So let's say you do this and you get an audit. Remember that the IRS job is to prove you wrong, right? They need to make money. And the way they're going to make money is by proving you wrong. So if you get audited, what they're going to do is say, where's your timeline? If you cannot provide the time log at that time, they're not going to take you seriously. Because, Avery, I can barely remember what I ate for lunch yesterday. So no way in heck do you remember your material participation two years ago. So you want to be very diligent. If you're going to take hundreds and thousands of dollars from the irs, you have to make sure you're serious about it. And you have a time log. And the IRS has, We've gone through it. They have asked for time logs.
I'm going on a tangent about the IRS audit because I think it's just something.
[00:11:25] Speaker B: I think it's super important. Please, engine away.
[00:11:28] Speaker C: People get scared of it, as they should, right? Like, I don't want to be audited either, but the last three times whenever I've been on the phone with an auditor, I'm like, hey, so what? Just trying to figure out, like, how did you get here? And the number one thing is that big depreciation. We had a client in Arizona with a million and a half of depreciation by itself. So, like, well, let's figure this out. Legally, everything was right, but there's a way for them to sort of see what returns we kind of need to look at. So you need to be serious about keeping track of your time log in order to make sure you pass an audit in case that happens.
[00:12:06] Speaker B: Yes. And I've heard. I obviously have not defended any, but I've heard from our clients that when they have been audited, and I've heard of a few not passing because they very angrily post in our Facebook group about what BS this is. And almost every time it's been because they did not log their hours at the time they were doing it. They said, okay, well, if I get audited, or I don't think they thought about, oh, if I get audited, I'll just do the log. At the time, I think they got busy. They didn't prioritize it, didn't do it, got an audit, and then tried to do the log afterwards at the time that they're being audited. And you just can't do that. And that could be very easily disproved because they're going to do things like if you said you live in California and you were in Tennessee working on a property, they can check your receipts, your credit cards, things like that, to see if you were actually there when you said you were. Nobody is going to be lying on purpose. But like you said, I have no idea what I ate for lunch over the weekend, and I certainly can't remember the times and dates and exactly how much time I spent doing things. So it really is best to. In the moment that you're doing it, just even if you just make a note in your notes app on your phone and go back and put it in a spreadsheet later just so you can remember when and what, so that you know you're. It is, you're getting a huge benefit, you can bother with logging your time.
[00:13:32] Speaker C: Yeah. I think it's so important when people complain. It's obviously 95% of the time, but there's three sides to the story. Right. But I can actually attest and say that three years ago, a client got audited and they lost. And the reason they lost was because they did not have their time log. I'm a very honest person. I'm a straight shooter. So I'm like, I told you to do it. I can't hold your hand and do the time log. But they understood now what happened. They didn't go to jail. They didn't like all this crazy thing. They paid me a lot of money to defend them at the beginning. Couldn't find the audit. But the problem is they have to pay all that money back. And it sounds, oh, well, whatever. People might be like, I'll just pay the money back. The problem is the penalties and interest accrued that can be hundreds and thousands of dollars depending on your refund alone on top of your refund. So honestly, it's just don't take it seriously because you're getting a huge refund. And remember, their job is to make. To prove you wrong. They're going to do whatever it takes to prove you wrong.
[00:14:31] Speaker B: So you've defended seven of them in the last year successfully. Has there been any common themes of things that your clients have done well and correctly that have kind of been the thing that shut the door on that audit?
[00:14:46] Speaker C: Yes. I will die on this hill if anyone follows me online. I talk about it all the time, and I will talk about it every single day. It's your accounting. My goodness.
Having bad records is going to make or break besides the time log. Here's what happens, right? The auditors, I keep saying this, but it's true. Their job is to prove you wrong. And they can essentially say, hey, let me see your time log. And then they like it, and they say, all right, Avery, you know, I found this other meals and entertainment over here. Can I see what that Meals and Entertainment was for 2025. They have every right to do that, Right? So if you're able to provide a detailed profit and loss statement with every single expense that you had, that's easy. And time and time, time again, the auditor has said, just so you know, the fact that you guys had really good records has really helped not only expedite this process, but believe that you guys are doing it correctly. So if they did miss a receipt or something, the auditor understands that you're taking this seriously. And it's a business, not just a hobby that you have on the side to get a refund. They know that you have all the records. So having proper record keeping from day one is going to save you. And the IRS audits that we've gone through are proof of that. And it's so easy nowadays. I think one Last thing I will say on this is that most people, most investors don't budget this when they're buying a property. Right. They'll say, I'll just do it.
You're not going to do it. One, you don't know what you're doing because it's not accounting. I don't blame you. So you need to outsource it. It's those people who are hoarding the money and the time to do the accounting that are going to have a problem at the end of the day.
[00:16:21] Speaker B: Yes. Don't put it off and go ahead and hire a professional. Because people actually with really anything, I so often they don't want to pay for something because they're like, like real estate agents. Oh, I don't want to pay a real estate agent. I can, I can just write the. It's just writing a contract. I can find the house on Zillow. But you're paying for the expertise and the. I've seen this a million times. Whatever. I'm not here to argue why real estate agents are important, but they think, oh, it's just logging some stuff in QuickBooks. It's attached to my, all my credit cards and stuff. I can do that. I'm not paying somebody to do this small task that I can do.
You can't do it. You cannot.
[00:17:00] Speaker C: Thank you.
Thank you. The amount of times I see people trying to do their own accounting, their own taxes, and I'm like, okay, sounds good. Don't call me then. Just do it yourself. But it's not like when I, when, when you compare the people who are successful and whatever your goal is a millionaire, you know, having 10 homes, there's a big difference. And it's that they understand the value of having professionals. That's it. Their time is better spent doing whatever you're good at. I'm not going to do my own bookkeeping. Can I? Absolutely. But I know that I have to run a company and have employees, so I would never try to do it myself.
[00:17:36] Speaker B: Right.
Totally agree with that. And along those same lines, don't use, like, legal zoom to set up your LLCs and things for holding your properties because it's going to cost you more money later to undo all the things that you did wrong because you have no legal experience and you paid 1,000 bucks on the Internet to do it, or however much, I don't know, use a real attorney from the beginning and a real CPA and a real bookkeeper.
Actually knew a friend of mine, an investor who had like 10 short term rental properties and owned a business and was still using TurboTax after like 10 years.
[00:18:12] Speaker C: I have a story for you on this if you want to hear it. Yes, I have plenty of stories, but two things with the legal Zoom. Let's go back. I think your audience will really, really appreciate this.
Do not use legal Zoom. Many stories. Number one, if you're married, you automatically, when you go on legal Zoom, think that you're a partnership. You're not a partnership. Right. It's you and your spouse. It does not mean anything, but it creates a partnership return. I'm getting too nerdy. Which creates legal fees and accounting fees that you probably don't need because you're not even protected by the Partnership LLC. So that's number one, use an attorney. Number two, when it comes to TurboTax, we had a client who used TurboTax. Very wealthy, had rental properties, got audited, forgot to check a box. Just one little box. Then no reason you should know that, right? But TurboTax was what, $150 and you could do it in three hours. Sounds good. Ended up paying $96,000 when they got audited.
I honestly don't feel bad.
I tried to like, but I'm like, my friend, you can afford to hire, you know, a CPA, but $96,000, you know, just for using TurboTax. So don't do it.
[00:19:20] Speaker B: Yeah, that just, that's painful. I'm just thinking use real professionals, guys. When you're, you're setting up important hundreds of thousands of dollars of assets, millions of dollars of assets.
[00:19:32] Speaker A: Even when it comes to buying and selling your first or next vacation home, you need to work with the best.
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[00:19:59] Speaker B: that I see all the time is, well, yeah, I'm a, I'm a doctor or I'm an engineer, but I think I can get real estate professional status. I think I can, I can show that because. Can you talk about that argument for a minute and why that's probably never gonna work?
[00:20:15] Speaker C: It's never going to work. Like, don't try to do it. Real estate professional status. So if you're scared of an audit, there is a box, by the way, that is checked when you saying that your real estate professional status, that box automatically, from what the IRS agents have told me, doesn't trigger an audit. But you get put in a, like, you know, with AI, a box is checked, your tax return gets move to some sort of Dropbox on their irs. That means that hey, these people are saying that their real estate professional status, I'm going to have a better.
If I was an IRS audit, I would be like, hey, let me audit these people because I'm sure they're not going to qualify. So automatically by you checking that box, the IRS is like, hey, I might audit you. Right. Number two, there is absolutely no way. There's been court cases where people are like, well I work from home.
I'm not really working at my job, so I'm working more on my rentals. The IRS will say, okay, well let me call Chase bank and let them know that Anna was not only stealing from them because they should have been working a full time job at Chase bank, but now they're trying to steal from the irs. So it's like if you have a full time job, it is nearly impossible for you to qualify for real estate professional status. If you have spouse, they should quit their job and they should become rep status. But it's not going to happen. We're not going to do it. I don't care if you're an. The firefighters are all their ones. Well, I only work four days a week and I'm always, we're always on call. It doesn't matter. You're supposed to be at your job those 40 hours a week.
Sorry.
[00:21:42] Speaker B: Yeah, yeah, that also I just got. It's just easier to do it the right way. And, and everybody thinks that they've, they found this, this loophole, this thing that well, I'm going to be able to do it because of this. And like the IRS has seen it before probably a lot of times. So you're not tricking anybody. There's no reason to try and get cute.
[00:22:05] Speaker C: Just do it.
[00:22:06] Speaker B: Right. You don't need real estate professional status to use the short term rental tax strategy, so why bother with it?
[00:22:14] Speaker C: Correct. Yeah, it's the short term rental tax loophole law is a lot easier and if you are trying to qualify for reps, there are ways to do it, especially with your spouse. We have had spouses quit their jobs, but it's definitely something to be taken seriously. The irs someone you don't want to mess around with. Because if you think that you have gotten away with it, you've seen the news. Everybody gets caught for tax evasion. It's wild to me that people do this, but you will get caught.
[00:22:42] Speaker B: Yeah, just don't try it.
Yeah.
Okay, so we talked about material participation. We've talked about bonus appreciation. We've talked about making sure you're using the correct professionals and not trying to pull the wool over anybody's eyes. What else have we not talked about that we see a lot when it comes to people wanting to utilize this strategy, maybe pitfalls that they've fallen into or things that you must do to make sure you don't fall into the pits.
[00:23:11] Speaker C: Yeah, I think social, just with any industry, social media has now had an influx of everybody's attack strategist. Oh, yes, everybody and their mother all of a sudden took a YouTube class and it's a tax strategist, which, listen, I love the Hustle. Don't get me wrong. What I want to warn people is that when you sign you as an individual sign your tax return, you, Avery, are saying that you have reviewed it and you agree with the numbers that are posted on your tax return.
I'm sure you work with a cpa. You sign an engagement letter. Let me just tell you that the CYA for us. Because I'm not here to audit you, Avery. I'm here to just say how I'm going to do the best I can.
So if you're going with someone who has no experience in short term rental, is trying to tell you that they're going to do all these things, they're going to write off your entire life and then this and that, and they sign your return, and you sign the return, you're saying that you agree. So in case of an audit, people think, oh, well, it's Anna's fault, I'm just going to put it on her. And unless that's why I have that engagement letter. So unless you can prove that I or your CPA did this maliciously and are trying to scam the system, it's on you, Avery. Do you want to come for me for the 25k? It's going to cost you more for an attorney. So guess who's going to end up eating the fees? You. So it's really important that you do take this seriously. And you don't just go with someone who doesn't know, who's not an expert, who has proven this, and honestly walk the talk.
Because it's easy. Everybody can post something online. It's not to anybody. It's just in every industry, there's, oh, there's somebody out there. There's a thousand. Right.
But know that at the end of the day, it comes down to you. And unless you can put a class action lawsuit against these people Good luck.
[00:24:58] Speaker B: Yeah, I've actually there's been such an influx of influencers, whether they're real estate influencers or just like entrepreneurship influencers, posting tax content, that there's now an entire new genre of tax influencers that all they do is post reaction videos to dumb things that, that people post who are not CPAs about taxes.
I love that. I love watching them. But a quick question, because I did see a CPA recently post that if you are an influencer, then you can write off like your hair extensions, your makeup, your things like that. And it sounded a little out there to me, but so I would like to hear your reaction.
[00:25:42] Speaker C: Yeah, I would love to listen. I love Botox. I love anything that's going to keep me young. Okay. And just because I have to be on camera, it's not doable. So here's what. When it comes to these type of cool things like my nails, whatever you're into, the problem lies.
Unless I'm going to drop off my nails here and I use them for the rest of the day because I needed them for Avery's podcast, it's impossible for me to prove that my nails are bringing revenue to the business.
However, I have a lot of clients who are in the adult industry.
There are weird requests that people have. So if someone has a request that I need to paint my nails a certain color and I'm going to get paid for that, that manicure or that pedicure could be a thing.
But that industry so different than me having Botox to be on here. Right. I would love that. Extremely possible. Right?
So it would be really hard to prove that my Botox is bringing in revenue.
[00:26:39] Speaker B: Gotcha. Yeah. Something that I read about, it was if it's maintenance that you're going to be doing anyway, like I'm going to have hair extensions whether I'm on camera or not, then it's very hard to prove like, that you wouldn't have those if you weren't going to be. It's just the line between what you would be doing with your appearance just to look good because you want to and to look good because you have, as you know, because you have a YouTube channel, it's really hard to prove that different.
[00:27:08] Speaker C: And honestly, these strategies that people are out there saying are, in my opinion, and this is just my opinion, are so much low hanging fruit. Like, my wealthy investors are not worried about the narrows. They're like, okay, how do I buy my next property? How do I do commercial? But they're like, I'm not worried If I can write off my nails or not. Right. I'm not. That's the least of their concerns because their, their thoughts are so much bigger than just your nails.
[00:27:33] Speaker B: Yeah, that makes sense.
[00:27:35] Speaker C: Okay.
[00:27:36] Speaker B: Any other pitfalls that listeners need to be aware of if they want to execute this strategy?
[00:27:43] Speaker C: I think we'll always, you know, talk about the, the short term rental loophole requirements. On average, it has to be seven days or less. So it does have to work. Such I would tell people like a hotel, right? Like seven days or less. As well as you have to materially participate.
Now this sounds easy, and I think I'm going to go back to using a professional because. Just. Because.
Let me give you an analogy. If you have a headache, Avery, you're going to go to the doctor, just your family doctor, right? And the family doctor might prescribe you something. But then the headache continues and you're like, okay, I need to go see a specialist. This is exactly what you need to think of when you think of your CPA at the beginning. When you have a small business, your CPA that your dad referred you to 50 years ago might suffice. But you get to a point in your career or in your investment that you need a specialist to help you get to the next level. And that little checkbox and that investment is the difference in tax savings that your CPA from 20 years ago and this new CPA is going to make a big difference. Obviously the investment is a lot different, but it's worth everything for you to actually use a specialist that knows the tax law and is actually going to defend you in court when they tell you, hey, write off your dog.
All right? And if you told me to write off my dog, you better be here if I get audited, not just disappear after three months.
So this is something that you just don't mess around with, like get your taxes done by a professional and make sure you follow the rules. And yes, there are cool strategies and you know, people travel and they ride off their G wagons and yes, that's all great. But what I'm telling you, that it's all for show and for social media and it does great clickbait and we all. I love it, don't get me wrong. But at the end of the day, it's not worth it.
[00:29:28] Speaker B: You can also rent those, all the super luxury cars you can rent. Now if you go to Vegas, you can rent a private plane to do or private jet or whatever in the hangar. It's sitting in the hangar for you to do social media.
So like don't always believe everything that you see on there anyway.
[00:29:46] Speaker C: Correct. Yeah. And yeah, that could be a write off, that could be for your YouTube channel that you rented the private plane. There you go. Instead of buying one or just have a friend who owns a private plane. It's a lot easier.
[00:29:56] Speaker B: Yeah.
Okay, Anna, so we're getting towards the end of the show and we ask every guest 3 kind of lightning round questions. Are you ready?
[00:30:07] Speaker C: Yes, ma'. Am. Okay.
[00:30:08] Speaker B: They're personal ones. I'm not going to try to stump you. So number one, what advice would you give 20 year old Anna if you knew then what you know now?
[00:30:17] Speaker C: Personally I would not buy single family home rental properties. I would save my money and start in multifamily or commercial or mobile home markets.
I bought rental properties and they're great, but they're not that great as people think. They're not going to make me rich, that's for sure.
[00:30:36] Speaker B: Right. You have to do them at extreme scale.
[00:30:39] Speaker C: Correct? Yeah.
[00:30:41] Speaker B: So I've got a few hundred single families, but I started with one single family long term and then switched to vacation rentals and then did a few more single families and I was like, wait a minute, we have eight closings in one day, let's just buy one eight unit and then moved up from there. And then now I'm back single family long terms because everybody says they don't work.
[00:31:02] Speaker C: So I'm like, I think, yeah, no, they do work. I think it depends on your, what you're doing. Right. Like what is your strategy and what do you want? So where I was at 20 years old, I know that and now where I am, that's not what I wanted to do. But that's for me only. And everybody is different.
[00:31:16] Speaker B: No, no, of course. And it, the cool thing about real estate is it all works. And the reason, if you do it right and the reason why we're back in single family long terms is because there's less competition. A lot of the newer people don't want to mess with because you have to buy 20, 30 of them for it to work.
[00:31:32] Speaker C: Correct? Agreed.
[00:31:34] Speaker B: It works better for us where we are now than it did at the beginning. All right, number two, what advice would you give a new short term rental investor who's looking to get started today?
[00:31:46] Speaker C: Do tax planning once before, whether you buy the property right before you buy it or after you buy it. Here's why. Because like I mentioned, your first year from a tax tax case is going to be amazing. But what I want you to understand is how are you going to get your second rental? And there are ways to get a second rental from retirement, from stocks, from anything else the year that you have that huge bonus depreciation. So I don't want you to wait till next year to plan. I want you to do it this year. Buy and plan so you can find money to find your second investment. Because what I see is that people get into their first investment and unfortunately, they don't have the capital to get their second investment.
But we could have done it in a very tax efficient way the first year.
[00:32:34] Speaker B: Good to know. So don't buy something and go, okay, I'm good till next year. And then not start until January, Correct?
[00:32:41] Speaker C: Yes, exactly.
[00:32:42] Speaker B: Okay, that's great advice. We haven't had that before. And last, what's your favorite book that's impacted your mindset?
[00:32:49] Speaker C: You know, last year I read the Gap and the Gain. I think that's what it's called. Right.
Man, that changed my life. I was so stuck in like, more, more, more, more, more, more, more, more. And I was like, wait, doesn't always have to be that way.
It's a great book.
[00:33:06] Speaker B: Yeah.
[00:33:06] Speaker C: It's just an entrepreneur thing that we have. Yeah.
[00:33:09] Speaker B: Always looking at how much further you have to go instead of looking at how far you come.
[00:33:13] Speaker C: Correct. Yeah.
[00:33:14] Speaker B: Yeah, that's a good.
Awesome. So that is it. Anna, thank you so much for coming on. If our listeners want to find you follow services, how can they do that?
[00:33:27] Speaker C: Yeah, absolutely. So social media is great. Tax boss. Anna, you can find me. I'm sure Avery will post it. And if you ever wanted to schedule a consultation with our team, you can do so also on Instagram and after tax season.
[00:33:41] Speaker B: Yes. I'm actually surprised you came on at this exact, you know, moment in time because it's getting.
[00:33:47] Speaker C: We're getting real close to the dyer. Yeah, no, it's cool. No, we have. Our staff is great. So this is what I love doing, educating people. So thank you so much for having me, Avery.
[00:33:55] Speaker B: Yeah, thank you so much for coming on. And listeners, we'll catch you next week.
