Rental Property Tax Benefits

For commercial real estate investors, purchasing rental property can greatly multiply revenue. However, there are a number of tax benefits to owning and running a rental property, whether it is a duplex, an apartment complex, or a corporate office building.

Rental Property Repairs

All repairs made on a rental property are fully deductible. Painting, rewiring, window replacement, or anything else which falls under “necessary repairs” can be itemized and claimed for the years in which the repairs are made. This deduction is especially handy when a property is first purchased and renovated.

Contractors And Employees

Contractors and employees hired to do work on or in a rental property can also be claimed as tax benefits. Money spent to pay for wages falls under an operational expense, and is therefore deductible. This means property managers, repair people, landscapers, and the like fall into this category.


Interest paid on mortgages, loans, and even credit card expenses (when used toward the rental property) can also be deducted. Often, this is a rental property owner’s biggest source of outgoing money, and being able to recoup those expenditures on a yearly basis is a huge advantage.


The IRS provides rates for mileage and gas used when driving to rental properties. If property owners are called on-site for repairs, to show vacancies to potential tenants, or even to go out to a store and purchase material to fix something, Section 179 of the tax code provides for deductibles. On a broader scope, if a landlord is called in on a property emergency, and needs to book an overnight flight to check on a property, those expenses can also be deducted. Keep in mind, something like overnight flights are scrutinized much more closely than ground travel deductions.

Insurance Premiums

Insurance premiums paid on a rental property (fire, theft, vandalism, etc.) can be deducted, along with the cost of health and workers’ compensation for employees. As most rental properties require even basic liability insurance, it is important to remember to deduct these amounts when filing taxes.

Legal Fees

All money paid toward legal fees, attorney representation, and contract drafting can be claimed on the yearly tax forms. Keep track of all receipts, as legal services are considered operational expenses.

If you would like to learn more about financing a rental property, and the most advantageous options available for commercial real estate investors, call Bayard Business Capital at 314-312-4603.

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