[Tyler]

If you need a replace the AC, Roof, heater or water heater in a house can you Wright all that off on your taxes?

[Ross]

When you write something off, it just doesn’t get taxed. So, if you spend $1,000 and it’s 100% deductible, that means you’re saving the ~30% in taxes you would have paid if it had been income. So in this example, the real cost is only $700.

[Damon]

Real estate can be a good investment but it’s not a “you can’t lose” investment. Capital expenditures and vacancies are your top two concerns. You can depreciate the expenses but you still need enough income to cover it.

Don’t miss: LLCs for rental properties… worth it?

[Megan]

Large repairs have to be depreciated over the useful life of the repair. It’s important to remember that something you take as a deduction doesn’t come back as a refund.

[Kimberly]

The deposit doesn’t cover anywhere close to the damage a tenant can do.

[Sara]

My neighbor has a rental.

The tenant stopped paying rent, clai.ex squatter right and then got a restraining order against him claiming harassment when he tried ro evict.

Now he can’t do anything but hope she leaves.

[Mark]

If you have common sense and aren’t a complete moron when selecting and managing tenants/property, the positive far outweigh the negative. Of course there are risks. You could get hit by lightning today or run over by a bus – you better stay home!

Yes, I’ve had my fair share of headaches but rental income has built a life I never would’ve had without. Do it.

Explore these too: What do you believe is the best way to improve your finance?

[Bryan]

Also, I think you’re confusing deductions with tax credits. “Writing off” repairs isn’t a dollar for dollar refund.

[Mark]

Do u actually want a list in all the ways you can lose money with rental property?

[Tamara]

A deduction isn’t the same as a refund.

Our neighbors had a rental get trashed and the amount of money in legals fees made fighting it extremely expensive.

Also, check out: When calculating home equity as a part of net worth do you generally subtract sales costs for properties?

[Kari]

Renters can do a ton of damage and not pay rent. I had a guy owe more than $10,000 so I went to court and got a judgment against him. He then filed bankruptcy and I will never see a dime of it.

[Dion]

When calculating the yield on a rental, we set aside a percentage of gross rents for future repairs, maintenance, capex and vacancy.

Meaning, tenants pay for those repairs and expenses do not impact cash flow.

I set aside 10% for repairs/maintenance and 5% vacancy.

Even in years where I replace a roof, I’ve not come close to spending that 15%.

[Michael’n]

Collapsed Pipes 3000, foundation 6000, roof 11000, paint repairs, bug spray 4000, new tenant trashes the newly renovated place 3000, lost rent 3000. Lucky insurance covered the roof, and previous years with no issues paid for all , so far braking even with a lot of stress.

[Author]

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