Are Home Repairs on Rental Property Tax Deductible?

are home repairs on rental property tax deductible

Whether you’re a landlord or a renter, you may wonder if home repairs on rental property are tax deductible. While most home repairs and maintenance are not, there are some that you should know about. Here are a few things to consider:

Cleaning

Keeping your rental property clean and safe is a good idea to prevent damage and deterioration. The best part is that this is a tax deductible expense. While you are at it, make sure to keep your receipts.

The best time to clean your property is before a tenant moves in. This will save you the hassle of repairing the boo-boos later. You also have the advantage of knowing what to expect from your new tenants. A cleaning company might even be able to make your life easier with a checklist to follow.

Aside from cleaning, you’ll also need to invest in rental equipment and supplies, including a reliable home security system. This is an expense that you want to budget for each year, not just during the busy holiday season.

Painting

Whether you are a business owner or a homeowner, you can deduct the cost of painting home repairs on your rental property. However, you should always check with a tax pro first.

Painting home repairs on your rental property is a significant investment. Usually, it costs around $3000 to $5,000 to have a licensed painting contractor finish the job. Depending on the size of the house and the quality of the paint, the cost can vary.

In addition to painting, there are several other tax deductions that you can take. You can write off a variety of expenses that meet your business needs. Some expenses include travel, health insurance, and insurance for your vehicles. You may also be able to write off your cell phone bill or internet service.

Updating appliances

Whether you are planning on investing in real estate or simply renting out your current abode, updating your appliances is a smart move. Not only does this boost your ROI, it also helps ensure that you have happy tenants. Modern appliances are a signal to potential renters that you take your properties seriously. Besides, updating your appliances is cheaper than buying a new one.

While you are at it, you may want to consider replacing your appliances with energy efficient models. In addition to the usual maintenance concerns, a new stove or refrigerator can also reduce your utility bills. Keeping your appliances clean and functional can reduce your maintenance budget as well.

Updating flooring

Adding new flooring is a great way to add value to your rental property. Not only will your tenants be thrilled with the new look, but you will be able to reap the benefits of increased rents and a tidy tax return.

Besides adding value to your property, updating the flooring can also prove to be an easy task that requires little prep work. In fact, you may be able to avoid having to pay a fortune to have a professional install new flooring in your rental. If your rental is a rental office, you may be able to score a discount on the price of new flooring thanks to federal tax incentives.

Business expenses

Whether you are a landlord or a rental property owner, home repairs on your rental property are tax deductible as business expenses. However, you must keep detailed records of all expenses to claim your deductions correctly.

Maintenance expenses are also tax deductible as business expenses. Maintenance costs help to keep your property in good condition, and prevent damage from occurring. These costs include lawn maintenance, cleaning, painting, and more. You can also deduct expenses associated with travel, such as the cost of showing your property to prospective tenants, responding to tenant complaints, and more.

Other deductible expenses include utility and maintenance payments. You can deduct a portion of these payments, or all of them, depending on the percentage of your home used for business.

Taking full advantage of deductions

Taking full advantage of deductions for home repairs on rental property can be a smart way to increase the profits of your property. However, you must know which deductions are applicable and which ones you can pass up. If you’re unsure, contact a qualified tax professional.

The cost of repairs to a rental property can be deducted in the year the work was done. Similarly, the cost of an improvement can be deducted over two or three years. The best way to deduct your repair and maintenance costs is to keep detailed records of all operational activities and expenses. You should also set up a separate checking account for real estate expenses.