Top 10 Tax Deductions Rental Property Owners Shouldn’t Overlook
Owning rental property offers excellent opportunities for building long-term wealth—but only if you take full advantage of the tax deductions available to you. Each year, thousands of landlords overpay their taxes simply because they don’t know what deductions they qualify for.
Whether you own one rental home or a portfolio of properties, understanding these deductions can have a direct impact on your bottom line.
In this post, we’ll walk you through 10 of the most powerful tax deductions for rental property owners in 2025—plus tips on how to stay compliant and maximize your returns.
1. Mortgage Interest
Mortgage interest is often the largest tax-deductible expense for rental property owners. You can deduct interest paid on:
Your primary mortgage on the rental property
Secondary loans (like a HELOC used for property-related expenses)
Tip: Make sure the loan is specifically tied to your rental investment—personal interest is not deductible.
2. Depreciation
The IRS allows you to deduct the cost of your rental property (excluding land) over 27.5 years for residential properties.
This non-cash deduction lets you reduce your taxable income even if your cash flow is strong.
Example:
If your rental home (building only) is worth $275,000, you can deduct $10,000 per year in depreciation.
Warning: When you sell, depreciation recapture can apply—so work with an accountant to strategize in advance.
3. Property Management Fees
If you hire a property management company (like Pioneer Management), all related fees are fully tax-deductible.
This includes:
Monthly management fees
Leasing commissions
Application processing
Maintenance coordination charges
This deduction helps offset the cost of professional help while simplifying your investment.
4. Repairs and Maintenance
The IRS allows landlords to deduct the full cost of repairs made to keep the property in good condition. This includes:
Plumbing repairs
Appliance fixes
Painting and patching walls
HVAC servicing
Roof repairs
Important: Repairs are deductible in the year incurred. However, improvements (like a new roof or kitchen remodel) must be capitalized and depreciated.
5. Insurance Premiums
Premiums for landlord insurance policies are deductible, including:
Property insurance
Liability coverage
Flood or fire insurance
Umbrella policies
This deduction applies to both individual landlords and LLCs who own rental property.
6. Property Taxes
All property taxes you pay to your city, county, or state on your rental properties are deductible. This also includes:
Local assessments
Sewer or utility surcharges tied to property tax bills
If you own multiple properties, this deduction can add up fast.
7. Utilities (If Paid by You)
If you pay for utilities as part of the lease agreement, you can deduct:
Water and sewer
Electricity
Gas
Trash removal
Internet (if included in rent)
Keep receipts or invoices as documentation, especially if costs are split with tenants.
8. Travel Expenses
If you travel to manage, inspect, or maintain your rental properties, your travel costs are deductible.
This includes:
Mileage (65.5 cents per mile for 2023; check IRS for 2025 rate)
Airfare
Hotels
Meals (50% deductible if business-related)
Note: You must have proper documentation—keep a mileage log and receipts.
9. Legal and Professional Services
Any fees paid to attorneys, accountants, or consultants related to your rental activities are deductible.
Examples:
Eviction attorney fees
Lease preparation
CPA services
Tax preparation fees related to rental income
Always separate these from personal services to stay compliant.
10. Advertising and Marketing
If you paid to advertise your rental, that’s a business expense. Deduct:
Paid online listings (Zillow, Rent.com)
Print advertising
Social media ads
Professional photography or virtual tours
These costs can be especially significant if you own multiple units or advertise regularly.
Bonus: Home Office Deduction (If Applicable)
If you manage your rental from home and meet IRS criteria, you may be able to deduct a portion of:
Rent or mortgage interest
Utilities
Internet and phone bills
Office supplies
Caution: The IRS is strict on this deduction—your space must be used exclusively for rental business.
What You Can’t Deduct
Some common costs are not deductible, including:
Vacant property expenses not related to business
Improvements (these must be capitalized and depreciated)
Commute mileage from home to the rental (unless your home is your business base)
Security deposit refunds
Understanding the difference between deductible repairs and capital improvements is key—consult a tax pro when in doubt.
Recordkeeping Tips for Landlords
To claim these deductions safely and confidently, maintain good records:
✅ Use a dedicated bank account for rental income/expenses
✅ Save receipts and invoices
✅ Keep mileage logs and travel details
✅ Use accounting software (like QuickBooks or Stessa)
✅ Work with a property manager who provides monthly and annual financial reports
How a Property Manager Helps at Tax Time
A good property management company doesn’t just keep tenants happy—it keeps your books in order.
Pioneer Property Management provides:
Monthly income and expense statements
Year-end 1099 forms
Maintenance records
Lease and tenant history reports
These reports make tax prep faster, easier, and more accurate—so you can focus on growing your portfolio instead of drowning in spreadsheets.
Final Thoughts: Don’t Let Deductions Slip Away
If you’re not actively tracking these deductions, you’re likely leaving thousands of dollars on the table each year.
Working with a professional property manager and tax advisor is the best way to ensure you stay compliant while maximizing your savings.
👉 Want tax-smart property management in Oregon?
Contact Pioneer Property Management today and get professional support that pays for itself in tax season savings.
