Top 4 Landlord Tax Deductions in San Diego | Property Management Education


There are several investment property tax deductions that most investors know about. Everyone is going to deduct their mortgage interest, property taxes, insurance, commissions, and those types of things. However, we have noticed that there are some deductions that people miss. New clients often don’t know about these, and we want you to be aware of them.

Personal Property Purchases

In the last couple of years, there has been a deduction available for up to $2,500 on personal property. Many real estate owners aren’t aware of this. But, if you buy appliances or window blinds, you’ll probably plan to depreciate those things over five to seven years. With the new law, however, if you meet certain requirements and make specific elections on your tax return, you can deduct 100 percent of those purchase costs, up to $2,500. Let your accountant know you are making these improvements to your units.  

Bonus Depreciation

Another deduction people tend to miss is bonus depreciation. You can write off up to 50 percent of the cost on new personal property items that go above the $2,500 limit. So, if you have a high end rental and you’re putting in a $3,000 coffee maker, you can write off 50 percent of that cost in the first year.  

Refinancing Closing Costs

When real estate owners are refinancing their properties, there are a number of closing costs that can be written off over the life of a loan. When you’re refinancing your own home mortgage, unless you’re paying points, you don’t get to write off any escrow costs. But, if you have a rental property, make sure you capture the costs and write them off over the life of the loan.

Travel Costs

If you’re traveling to your rental property, you can deduct those expenses. Even if you live 30 or 40 miles away and you have to drive to the property, you can deduct the mileage rate that the IRS uses, which is roughly 56.5 cents per mile. It adds up and gives you an additional deduction.

These are four deduction items we see a lot of people meeting. If you have any questions about tax deductions for investment property owners, please contact us at Mercer Properties. We’d be happy to help you with all your San Diego property management needs.