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An Owner’s Guide to Rental Property Tax Deductions

Norfolk Rental Property Owner Doing Her TaxesOne of the primary advantages of owning Norfolk rental properties is that, come tax time, you can benefit from deductions that other taxpayers cannot. However, to benefit from these deductions, you need first to know what they are and how to have your numbers ready before you start filling out your return. In this guide, we will mention the tax deductions that rental property owners can claim and how they might help reduce your tax liability each year.

Common Expenses You Can Deduct

Identifying your property’s common expenses helps optimize your cash flows. It can also assist you at tax time because you can deduct most of them on your return. Budget expenses that are also tax-deductible include:

  • Repairs and maintenance. Anything you give to maintain the condition of your property is generally a deductible expense. This includes fees paid to service providers, contractors, etc. Remember that improvements – mainly major ones – are not deductible as expenses. For that reason, they should be amortized as capital improvements.
  • Insurance. Insurance premiums for your landlord insurance policy, including any fire, flood, or personal liability insurance, are deductible expenses.
  • Utilities. You can deduct utility payments on your tax return if you pay for any utility service, like water, garbage, electric, or gas. Utilities paid by your tenants are not deductible.
  • Advertising. Any money you spend to market your property and/or find a new tenant is a deductible amount. This covers costs for a web domain or website hosting, online ads, and professional fees for photography or video tours.

Additional Tax Deductions

Alongside common expenses, there are some other deductions that rental property owners may apply to help reduce their tax liability. These tax deductions include:

  • Mortgage interest. Any mortgage interest you pay on related loans is tax-deductible for investment properties. This is normally one of the most valuable deductions for rental property owners.
  • Depreciation. Another great deduction that rental property owners can take is depreciation. Most properties are likely to depreciate over time due to wear and tear. The reward is that you can deduct a certain amount for this depreciation over the life of the property. You can also take depreciation on capital improvements, such as appliances, fences, and renovations.
  • Legal and professional fees. In the same manner that you might deduct expenses paid for repair work or landscaping, you may also deduct expenses paid to attorneys or other professionals who provide services related to the management of your rental property. Most costs associated with eviction, Norfolk property management, and tax preparation are also deductible.
  • Travel. Owning rental properties often takes a lot of back-and-forth travel, whether you dwell in another state or only a few miles away. Those business-related miles can add together over a year and are deductible on your tax return. Just keep a log of your travel miles and any other travel-related expenses.

To take full advantage of all the deductions granted to you, you ought to keep your property-related expenses organized and in one place. And you don’t need to wait until the end of the year; you can start keeping track of your expenses immediately and add as you go ahead. Doing it this way can make your experience better every year when tax season comes around.


Getting Real Property Management Hampton Roads to monitor your operational expenses is one more technique to make tax time uncomplicated. Aside from professional property management, we watch over your property’s income and expenses and provide reports that can make tax time much simpler. Contact us online to learn more!

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