Some homeowners consider renting their property, often with the belief that they will receive good solid rental income during the rental period. Renting has definite pros, but also some cons you should consider.

One of those areas that a landlord may assume will offer a huge break is with regard to paying taxes on rental properties. Renting your home allows you to write off necessary repairs to the home – but an owner can only take the full deduction if the repairs do not significantly change the value of the property.

While you may like to add new, trendy lighting inside or outside the home, or similar updates/upgrades – so that you can charge higher rent – that will not allow you to claim them as “necessary repairs.” Necessary repairs include such things as replacing or repairing a leaky roof or replacing a faulty water heater. It typically does not include property upgrades. Improvements can be written off for tax purposes. However, an improvement that adds value or prolongs the life of the property may not be fully deductible in a single tax year.

Many property management guidelines explain that you should divide the total value of the property by 27.5 years “to calculate the yearly deduction you are allowed.” There are other deductions that a property owner can take, such as normal property upkeep and interest and advertising, but the pros and cons of renting should always be compared with those of selling the property.

Consider that you may get tenants who damage the property – or you may have to file eviction or pay for continued, ongoing upkeep and maintenance of the property. For this reason, many homeowners decide to sell instead of renting.

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