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Rental Property Tax Deductions

If you enjoy collecting rent checks each month, then you are going to love the tax deductions available. The following are some common rental property tax deductions:

  • Property advertising and marketing expenses
  • Payments for cleaning fees to professional companies between tenants
  • Professional property management or bookkeeping company fees
  • Insurance premiums paid for fire, theft, flood, liability, employee health and workers compensation insurance
  • Legal and professional fees paid to attorneys, accountants, and real estate investment advisors
  • Interest paid on the rental property’s mortgage

Often Overlooked Deductions

Being the property management leader, we have compiled the below rental property tax deductions often neglected by landlords. Taking these deductions could create the difference between seeing a profit on your rental property and losing money.

Costs in Local Travel

Do you drive to the hardware store and pick up parts needed to fix kitchen sink leaks? Do you drive by your rental property for an assessment? Never forget to track the miles driven in your car because these can be tax deductions in one of two ways: Either by using the exact amount paid (for gas, upkeep, and repairs on the vehicle) or by using the standard mileage deduction the IRS has predetermined.

Repair Expenses

Property owners must be careful in this aspect since the IRS classifies repairs and improvements into different categories. The IRS defines repairs as anything that maintains the property in good working order. Examples include broken window replacements or leaky faucet fixes. However, if you decide to replace all windows with double-paned or energy-efficient glass, this action falls into the improvement category because this could lengthen the property’s life over the years. While repair expenses are deductible, improvement costs must be depreciated.


As a landlord, you can recoup the expenses associated with obtaining real estate property through the use of depreciation, which lets you deduct a small part of the costs over a period of many years. Depreciation starts when the home is ready for rent, even if vacant. It stops either when the home’s cost is recovered or when you stop renting the property out.


A casualty loss occurs due to factors such as fire, theft, vandalism, earthquake, storm, flood, terrorism, or another sudden, unexpected or unusual occurrence. If your rental property was damaged due to one of these factors, you may be able to deduct a portion of your loss. The deductible amount is determined by how much of the property was damaged and how much of the loss was covered by insurance.

If you are interested in having your property managed by Real Property Management Metro Detroit, have more questions, or just want to speak to one of our team members, then contact us online or call us directly at 248-808-6550 today!

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