Landlords, Just For You: Top Ten Tax Deduction Tips – Part I

By E-Renter Tenant Screening
Posted on March 13, 2007 under Landlord Tips | icon: commentBe the First to Comment

If, you are in the rental business, then as a landlord you can be sure and most probably, you are paying more tax than you should on your rental income. Undoubtedly, you are failing to take advantage of tax deductions available to owners of rental property. What you still haven’t realized is that rental real estate is one source of income that offers the most tax benefits. Following are some of the top ten tax deductions for owners of small residential rental property.

  1. Perhaps, you have not realized that interest is a landlord’s single biggest deductible expense. For example, interest tax deductions include:
    1. Mortgage interest paid towards loans taken for buying or improving rental property,
    2. And, interest paid on credit cards for goods purchased or services provided for or on rental property.
  2. The other way to save on rental income tax shell outs is property depreciation. As you know, the actual cost of a house, apartment building, or other rental property is not fully deductible in the year it is paid for. However, residential property must be depreciated over 27.5-years and that is how landlords get back real estate costs i.e. through depreciation. The process involves deducting a portion of the cost of the property over several years.

That apart, landlords should make themselves cognisant with all rules and regulations before drafting tenancy leases or rental agreements. They must also take all necessary precautions, such as, tenant screenings, background checks on prospective tenants, including making certain all rental lease clauses are adhered to, as insurance for a litigation free landlord / tenant relationship. A simple click of the mouse and any landlord or property manager can visit www.e-renter.com for tenant screening and background check services. www.e-renter.com, the best tenant screening agency in America!

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