![]() There are a number of online software programs a real estate investor can use to track rental property expenses. For example, if you paid $140,000 for a single-family rental (excluding the value of the lot), you could take a depreciation deduction of $5,090.91 ($140,000 / 27.5 years) plus all of the other tax-deductible expenses above. In addition to the above expenses, real estate investors are also allowed to claim a depreciation deduction, up to 27.5 years for a residential rental.ĭepreciation is a non-cash deduction rental property owners use to reduce taxable net income. On the other hand, single-family homes often have a driveway or on-street parking, so there isn’t a parking lot to maintain.ĭepending on the type of property you have – single-family rental, multifamily, or condo – and the part of the country it’s located in, rental property expenses fall into one of two categories: Specific line item expenses will differ between property types and real estate investors.įor example, owners of multifamily property with common area parking may have an expense line item for parking lot maintenance. What is Included in Rental Property Expenses?Įach property expense is called a “line item” on your P&L. Copies of federal, state, and local tax returns going back several years (ask your accountant or CPA what the best practices are for your business.Records of sales or rental tax paid to the city or state for the monthly rent received from each property and tenant.Mortgage loan documents and a detailed record of loan payments made, including a breakdown of principal, interest, taxes, and insurance (PITI). ![]()
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