Rental-property owners take note: With tax season just around the corner, we compiled a list the best reasons rental properties are such great investments:
Residential rental property is the only investment asset that both appreciates and depreciates at the same time. When the value goes up on your property, the increase in value is money you can keep. Depreciation offers you a level of compensation for that wear and tear in the form of substantial write-offs.
Deductions that are less obvious include expenses to obtain a mortgage and fees charged by an accountant to prepare are Schedule E. A rental home can even be a houseboat or trailer, as long as there are sleeping, cooking, and bathroom facilities. The location of the rental home doesn’t matter—It can be in the United States or overseas.
For any business or property owner, the importance of keeping good records on a consistent basis is of the upmost importance.
The following is a list of some of the best write-offs regarding rental properties (each may have certain restrictions):
- Homeowner’s association (HOA) or condo fees
- Property taxes
- Management fees (e.g. Property Management)
- Pest control
- Mortgage interest
- Other interest
- Bank fees
- Education/professional development
- Leasing fees
- Legal & professional fees
- Meals & entertainment
- Automobile/car expenses
- Minor improvements*
- Major improvements/new assets*
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