Just like any business owner does, as a landlord you want to accurately account for any income and expenses. The most common income derived from a rental property is rental income, but what about expenses? Do you know which to account for? If not this guide is for you…

Property Taxes

This is one of your single biggest expenses as a landlord and thus one of your biggest deductions come tax time. Make sure to keep accurate records of any property tax payments you make even if their payment is included in your monthly mortgage. Keep track of them separately. Check your local town/city assessors website or even city/town hall and they should be able to let you know exactly how much your property taxes are and you probably get the bill mailed to you once a year also.

Home Insurance

This is another expense that may be paid with your mortgage, but you still want to account for it as a separate operating expense line item for your rental property. Your entire insurance premium is eligible to be deducted.

Landlord Paid Utilities

What utilities are you responsible for as a landlord? Let’s say you are responsible for common area electric, water, and sewer. All of those are operating expenses and should be kept track of accordingly. These are just examples, but any and all utilities you pay for as an owner would qualify. Note: you cannot write off the utilities your tenants pay. Hopefully that goes without saying.

Trash Removal

Some municipalities include trash removal cost in their property taxes and if so you just account for it that way. In places where your trash is picked up by a private company any money they have charged you for their services is an operating expense.

Homeowners Association (HOA) Fees

Is your rental property a part of a HOA? Those pesky fees coming out of your pocket every month are most certainly an operating expense. If you have never noticed, these fees may be one of the biggest costs you take on as a landlord so you do not want to miss them in your yearly P&L.

These are the first 5, the next 5 we will delve into tomorrow…