Deductions for Landlords: Property Compliance Inspections

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You may need to meet an inspector or insurance representative to view the condition of your rental property or its mechanical components. 



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Why are compliance visits necessary?

For local governments, your property must meet minimum standards for occupancy by tenants. The insurance carrier also needs to minimize their risk and confirm the policy premiums match the condition of the landlord's property. So, you must have habitable units and common areas, including exterior grounds. 

What are inspectors looking for during an inspection?

Most inspections focus on safety, specifically foreseeable dangers. It's why landlords must comply with local requirements for a rental property by performing annual checks of fire alarms, smoke detectors, and carbon monoxide detectors. Depending on your locality, you may use hard-wired or battery-operated devices.


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How can I prepare for a rental property inspection?

You should conduct a pre-inspection before your appointment date. Look for broken, damaged, or missing items that the inspector will write up on their report. The inspectors will test everything, so make sure it works ahead of time — you need to resolve observable issues.

TIP: Ask the city inspector or insurance rep if they provide a preliminary rental property inspection checklist or guidebook.


What can landlords deduct when visiting their property?

For landlords living in town, you can deduct the mileage from your home office or off-site office, whichever applies. If you live out of town or out of state, then you can deduct your transportation costs if the purpose of your trip is to conduct business. 

You can also deduct the new carbon monoxide detector and smoke alarm you replace in apartments, common areas, basements, garages, and attics. The same goes for fire extinguishers.

If you need to make small repairs, you can deduct the expenses (e.g., drywall patches, fresh paint, new light bulbs). For significant improvements, you must capitalize the cost over several years (e.g., elevator installation, ADA ramp, apartment tear-out)

TIP: The home inspection cost is deductible; also known as a site visit fee or inspection fee. 


What to Look For During a Property Inspection | www.deductingtherightway.com

DISCLAIMER: Please consult with your accountant, attorney and financial advisor before implementing any information displayed on this website. DIY research does not replace the advice of a licensed professional who has thoroughly reviewed your file.