| While the amount may not seem significant to some, | | | | the travel expense of owning property and miss out |
| every property owner knows that the tax deduction | | | | on what can be a significant deduction. If the owner |
| allowed for rental property can make a significant | | | | must travel to the rental property to meet with tenants |
| difference on the bottom line. Those who own rental | | | | or to make repairs, for example, the travel expense |
| property should be sure to take advantage of the tax | | | | may be deductible. Travel expenses incurred for visits |
| benefits of being a landlord. | | | | to plumbers, electricians and contractors can also be |
| Some of the common expenses that can be | | | | included in tax deduction calculations. If the visit to |
| deducted when figuring income taxes are:o Mortgage | | | | rental property involves travelling to another city, it may |
| interest. Payments made to a lending institution for real | | | | be possible to deduct airfares, hotel bills and some |
| estate loans usually include principal (part of the | | | | other costs.o Many rental-property owners conduct |
| amount borrowed) and interest (charges for loaning | | | | their business from their home, which allows them to |
| the money). Rental-property owners can borrow to | | | | deduct a portion of the home's square footage for |
| purchase property or to improve property. In addition, | | | | business purposes. Other expenses associated with |
| interest on credit card payments may be deductible if | | | | this home office may be deductible as well (separate |
| the purchase was strictly for the rental property. | | | | phone, office equipment etc.). |
| Rental-property owners should know, from the start, | | | | Property owners who work with a knowledgeable tax |
| that interest expense must be at the top of the | | | | adviser also deduct losses such as flooding and fire |
| deductible list.o Owners of rental property should take | | | | damage. The amount allowed for deduction can |
| care to reap the benefits of depreciation of property. | | | | depend on the insurance coverage terms, and the loss |
| In most cases, this deduction is available after the first | | | | may be figured as partial or full. This brings up another |
| year of ownership and generally continues for 27 | | | | key item in a successful rental-property business - |
| years. Property owners should consult with a tax | | | | insurance. Landlords are allowed to deduct insurance |
| adviser to make sure that depreciation is handled | | | | costs (premiums) for their rental property. Types of |
| correctly.o Rental-property owners know that keeping | | | | insurance include: landlord liability, theft, fire, flood etc. |
| up with repairs is one of the major tasks of being a | | | | Property owners should also keep track of fees paid |
| landlord. But repair costs are deductible for the year | | | | in connection with the rental-property business. This |
| the costs are incurred. For example, if it is necessary | | | | category can include fees paid to real estate advisers, |
| to put new tile on the kitchen floor of a rental property, | | | | property management businesses, attorneys, |
| refinish the walls with new plaster or drywall, or | | | | accountants etc. Those who own rental property |
| replace old/broken windows, the labor and materials | | | | should be aware that some expenses are not |
| cost is deductible. These repairs must be necessary | | | | deductible under current tax codes. If an apartment |
| for the daily operation of the property and should not | | | | remains vacant, for example, the property owner |
| be improvements made to enhance value (capital | | | | cannot deduct loss of income. New appliances and |
| improvements). Again, it would be wise to consult with | | | | room additions are not generally deductible. The advice |
| a tax expert to make sure this deduction is taken | | | | of a good tax expert is essential to a successful |
| properly.o Some rental-property owners forget about | | | | rental-property business. |