Rental property is often a good investment. You can collect rent to covers the cost of the mortgage and repairs while allowing you to own the property with little or no out-of-pocket expense. As the property increases in value, your net worth increases. There are somethings about taxes on rental income and loss you should know when you have rental properties.
Rental Income
- Rent paid and advance rent payments
- Security deposits not returned to the tenant
- Payment for canceling a lease
- Your rental expenses paid by tenant in lieu of rent
- Property or services you receive in lieu of rent, at fair market value
Rental Expenses
- Advertising for renters
- Cleaning and maintenance
- Commissions or management fees
- Insurance premiums
- Local transportation expenses to oversee the property
- Depreciation of rental property
- Legal expenses concerning rental property
- Mortgage interest
- Travel expenses
- Real Estate taxes
- Repairs and maintenance
- Supplies
- Utilities
- tax preparation fee for rental income
