F.A.Q's for Rentals
Here is a collection of frequently asked questions that I have put together to help you in renting or managing a property. If you have any other questions, not listed here, feel free to call or send an e-mail.
Q. Why is it better to own your home than to rent?
A. Initially, it may be more economic to rent because the monthly rent payments are usually cheaper than the mortgage payments. Besides, when you rent it's easy to get in with very little down and minimal qualification requirements. The down side is that when you finish renting that house, you don't own the house, the landlord owns the house. When you go to rent another house, you have to start all over paying rent at whatever the rent market is. In the mean time, you have not gained any equity because the house is not yours. The landlord gets richer and you remain the same.
Q. Are my mortgage payments deductible?
A. Yes, mortgage payments and property taxes are deductible in your income tax return, schedule A on your 1040 form income tax return. While you are getting an income tax break, you are also gaining equity because your house will increase in value like every thing else due to inflation.
Q. Are my rent payments tax deductible?
A. No. Unless you use your home for business, the rent that you pay is not deductible.
Q. What if I own a home and rent it out. Will my expenses be deductible?
A. Yes. If you own your home and you rent it out to a tenant, your mortgage interest, property taxes, maintenance, advertising, and most other expenses necessary to maintain your home and market it for rent are tax deductible.
Questions from Renters
You save money initially because the rent payments are usually less than the mortgage payments on a house. However you will eventually miss out on the appreciation and the increase of equity of the house and on income tax refund benefits that you would normally qualify if you owned the home.
Questions from Owners
Generally yes. starting with the mortgage interest, property taxes, mainenace, legal fees, advertising, even depreciation ( the invisible wear and tear of the dwelling) is deductible.
See more deductible expenses here