6 Tax Write Offs for Landlords

6 Tax Write Offs for Landlords rfinley@seodig… Mon, 11/23/2020 - 16:37

If you decide to become a landlord, you need to treat it like a business. You are going to need to keep up with your paperwork and start to prepare for tax season. To do so, you need to know what you can and can't write off with your new business. Some are cut and dry, while others are a little more complicated. For this reason, you should consult a tax professional as soon as (or before) you start your new adventure.

Tax Deductions For Landlords

Here are some common tax write-offs that you won't want to miss.

Interest

You can write off your mortgage interest on your property. However, you can also write off interest on other loans and credit cards that you use to buy and improve your properties. You may use your credit cards to help you track the improvements that you make in your property, such as fixing leaking faucets and other maintenance.

You can also write off interest when you use your loans and cards for activities that you have related to your business. This includes any parties and get together that you have to get new tenants or even as a way to thank your current ones.

Depreciation

Depreciation can be hard to understand. The truth is that your rental property is going to decrease in value so you can write that amount off on a yearly basis. However, how much you can write off may be hard to figure out so it is important to talk to a professional to make sure that you handle it properly.

Employees and Independent Contractors

If you hire employees to help you run your business, you can write off their expenses. If you hire independent contractors to mow, clean up snow, and do maintenance around the property, that counts too!

Professionals You Turn To

As a landlord, you are going to work with a lot of other professionals and you can write off these expenses too. This includes your lawyer's fees, accountant, tax professional, and even those who guide you through the real estate process. If you use a management company to run your business, that is also an expense that you can write off. Investment advisors also count.

Travel

Though most landlords don't really think that they travel a lot, the truth is that they may be traveling around town looking at properties. They may also travel out of town to look at additional properties. Landlords can even deduct costs for traveling to home improvement stores and other places that they need to go that are related to their rental business.

Marketing expenses

Though you may consider marketing just part of running a business, the truth is that you can write these costs off. This includes any ads that you may place in newspapers and any postage that occurs when you mail things out. If you decide to build a website and maintain it, these costs should be deducted. If you hire someone to do this for you, that is an expense that can be written off.

The best way to make sure that you are prepared for tax season as a landlord is to hire an experienced tax professional. He or she will make sure that you don't miss any tax write-offs and you can keep as much as your hard-earned money as possible!

Your tax professional will be able to make sure that you don't forget any interest that occurs, your depreciation, and any marketing expenses. He or she will make sure that you deduct any employees, contractors, and even professionals, including their services)!

If you are thinking about becoming a landlord (or you would like to get some more properties), don't hesitate to contact us today. We have multiple properties for sale to help you get started.

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Uptick in Mortgage Applications in Early October

Uptick in Mortgage Applications in Early October rfinley@seodig… Thu, 11/05/2020 - 19:50

Despite the global pandemic and the hit that the economy has taken over the last few months, mortgage applications in early October took an unexpected rise according to the Market Composite Index following the first week in October. After months of a declining market, a small spike in these applications drew attention to what exactly was on the rise. The changes for this spike in mortgage loans may even be related to the COVID-19 pandemic and the effect it is having on citizens everywhere.

Refinancing Mortgage Loans

Of these increased mortgage applications, many of them were refinancing applications and current mortgage lenders attempting to take advantage of lowering their home payments as a way to maintain their finances in the months ahead. With a reduced income and the potential for a reduced income in the foreseeable future, these homeowners decided to take advantage of an opportunity provided to them by their lenders.

This is also relative to homeowners who have steady jobs that survived the pandemic and are able to maintain some form of financial stability among the economic unrest happening across the country.

Lower Interest Rates

Many lenders in states across the country offered a refinancing option for current mortgages as a way to keep their accounts current and assist them with the economy.  Lower interest rates in the housing industry through the summer appeared to have captured the interest of current homeowners and those in the market. This indicates that homeowners were looking to take advantage of these lower rates before they started to rise again. These interest rates have been some of the best that the housing industry has seen over the last decade.

VA Loan Applications

Part of the uptick in mortgage loans during early October is in part to VA loan applications. Because of the generous interest rate provided to members of the military, these VA loans offer a better option for first-time homebuyers or homebuyers in general who are looking to make a change. With these rates as some of the best in the industry right now, many of those who qualify for VA loans decided to take advantage of this offer just as those who took on refinancing their current mortgage.

Who Is Buying

Because the uptick happened in the VA loans and refinance applications, it seems as though these buyers are current or former home buyers looking to make moves in the housing market. There was a decrease in Early October for FHA loans, indicating that first-time homebuyers were stepping back due to the unpredictability of the economy.

The Shift in Loan Size

Because of the pandemic, the housing market has taken a shift in loan size across the market, with smaller loans being up more than larger homes and mortgage amounts financed. A lot of this has to do with families looking to downsize to more affordable homes and monthly expenses that parallel well with their current financial situation due to the pandemic. This means that larger homes are being listed, but smaller homes are selling quicker with more applications put in early on in October.

What Does This Mean For the Future?

These rising applications in the housing market indicate that there is still some interest left for citizens who want to make a move and want to take advantage of the right opportunity. While the uptick is rising, it represents the fact that the housing industry is still holding on and continuing to be successful despite the impact it suffered early on in the pandemic.

 

If you are in the market for a new property in Memphis or would like to speak to a real estate expert, give our team at Reedy and Company a call today. We look forward to assisting you with all of your real estate needs.

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