Deciding whether to sell your home or place it as a rental property can be difficult sometimes. Every situation is unique, and only you, your realtor, and your financial advisor can accurately assess what makes the most financial sense for you. However, you may be interested in learning about the lesser-known tax deductions for owners of rental properties. These can do wonders for your bottom line and help set you up for a healthy tax refund as well as an overall more prosperous year.
According to the IRS, many property owners can deduct the travel expenses that you incur when going to and from your rental property for activities like collecting rent, performing maintenance duties on the property, and other business-related duties. Be sure to keep a log of these expenses, noting the dates when the expenses occurred and the results of your action. (For example, did the tenant pay rent when you came to collect it, or did you have to make multiple trips?) The more detailed your notes, the better you can rest assured that you can help your accountant best determine your accurate deductions.
One thing that most property owners don't realize is that renting their property can empower them to recoup some of the costs of the depreciation of their property. It's an unfortunate reality of owning property that sometimes the value of your home may decline. If the value of your house declines during a year when you have a tenant, the depreciation amount may be tax-deductible.
As a landlord, you are probably going to be financially responsible for making repairs when things go wrong at the rental property. When you choose home leasing companies, you may be able to have a property leasing manager coordinate matters like repairs with tenants. Nevertheless, the financial responsibility will be on your shoulders, but the good news is that you can deduct all the repairs made on your rental home during the year. That's a win-win deduction, since repairs often also improve the value of your home.
Finally, keep in mind that the number of tax deductions that you're able to claim on an annual basis can increase in numerous ways once you become a landlord. A property leasing company can take the hassle and headache out of the process of being a landlord, and you can reap the benefits without having to deal directly with tenants. That way, you can keep your property, make a nice profit, benefit from tax deductions, and have the peace of mind that comes from home leasing companies taking the lead with all the work of being a landlord.