Owning a rental can be a strong long‑term investment—but the expenses add up. Many costs tied to operating and maintaining a rental may be deductible, depending on your situation and how your CPA classifies them.
This checklist helps Los Angeles County landlords keep expenses organized year-round so
tax time is easier, faster, and less stressful.
Start With the Two Big Buckets
- Operating expenses (ongoing): costs to run and maintain the property during the year.
- Capital improvements (long-term): upgrades that extend the life of the property or materially improve it—often depreciated over time.
The Deduction Checklist (Common Categories)
- Mortgage interest (and certain loan fees): keep year‑end statements and closing documents.
- Property taxes: annual tax bills and proof of payment.
- Insurance premiums: landlord policy, umbrella coverage (if applicable), riders tied to the rental.
- HOA dues and assessments: common for condos/townhomes across LA County—keep fee schedules and notices.
- Repairs and maintenance: plumbing, electrical, paint, landscaping, pest control, HVAC servicing, etc.
- Owner-paid utilities: water/sewer/trash and any common-area utilities for multifamily.
- Property management fees: management, leasing/renewal, admin fees—keep monthly statements.
- Advertising and leasing costs: photos, listings, signage, screening costs (if owner-paid).
- Professional services: CPA, legal consults, bookkeeping, rental-related software tools.
- Travel and mileage (when eligible): track date, purpose, and miles.
- Depreciation: building value (not land) depreciated over time; your CPA will set this up.
Record‑ Keeping That Makes Tax Time Easy
- Create one digital folder per property with subfolders for Repairs, Utilities, HOA, Insurance, Taxes, Lease Docs.
- Save every invoice + proof of payment (receipt/bank record/portal statement).
- Add a one‑line note on each invoice: what it was and why it was necessary.
- Tag big-ticket work as “review for capital improvement.”
- Keep move‑in/move‑out photos and inspection notes to support repair claims tied to tenant damage.
LA County Reminders
- HOA-heavy pockets: condo rules and fees can add complexity—document everything.
- Older buildings: preventative maintenance and code compliance planning often saves money long-term.
- High-demand submarkets: vacancy can be expensive—keep make-ready work organized and fast.
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