Cash Flow

Rental income plus tax refund from depreciation less expenses = Cash Flow before Taxes. With our current New Braunfels / San Antonio duplexes and homes, the high ratio of rent To sales price provides a positive cash flow in most cases.

Tax Benefits

You will deduct depreciation on your tax return each year giving you cash free Reduction in your taxes. Depreciation is computed as approximately 3.25% of purchase price over 27.5 years. (Your tax preparer may use other methods to give you a greater deduction.) You can also deduct 100% of interest, taxes, HOA dues, maintenance and fees. Consult your tax preparer.


In the New Braunfels and San Antonio Metro area, we have had an increase in value of approximately 4.4% per year in the median price of duplexes and homes. Starting at $63,000 (January 1990) to $178,800 (June 2013) – a period of 23 1/2 years. This shows a stable long term increase in value and a substantial increase in equity over 5, 10 and 15 years. (see Texas A&M real estate website: www.recenter.tamu.edu/data/hs/hs460.asp)

Principal Reduction

Each month your tenants make rent payments to cover the mortgage payment that reduces the amount of the principal loan. Over time the principal reduction becomes a significant amount of equity in your property.

Equity Return

On the sale or tax free reinvestment of your property, your gross equity will be returned in three ways:

a. Appreciation – increase in value over time (See #3 above)
b. Return of your original down payment
c. Principal reduction (See #4 above)

 Your renters are paying off your mortgage, paying your taxes, insurance and expenses & giving you an up-front positive cash flow.