As a landlord, any professional services you require to maintain the investment may be tax-deductible. Property management services are tax-deductible and will most likely lower your tax bill. You may claim the entire cost of the services, but you must keep all of the invoices or statements the property management company issues you as evidence of the deduction’s eligibility.
Organization
Not only are the services property management companies provide tax-deductible for the landlord, but they provide serious organization. Part of property management is issuing and managing all of the paperwork between the tenant and the landlord. This can come in handy come tax season, especially for landlords who are not particularly organized or good at bookkeeping. This allows the landlord to take the maximum deductions and credits she is permitted that may have been missed had the paperwork not been organized or easily sortable.
Long-Distance
While not necessarily a direct tax advantage, landlords who live far away from their rental properties benefit from property management. The property managers act as a liaison between the tenant and landlord, filing all the necessary paperwork and handling day-to-day issues. This is especially useful because all maintenance and repairs will be issued to the landlord through invoices from the property management company, which keeps all your tax-deductible expenses from the same source.
Delegation
Even for landlords who live close to their rental properties, the daily management of large or multiple properties can easily become a full-time job in itself. If a landlord does not wish to make property management her full-time occupation, delegating to a property management firm allows her to do with her time as she wishes, whether that is for work or leisure. Property management companies will also use their expertise and contacts to conduct business with the landlord’s best interest in mind to keep the landlord as a client, often better than landlords without experience would do for themselves. This is not only reflected in the management of the property, but can increase your eligible tax deductions you may have overlooked, such as low-cost but deductible energy-efficient upgrades.
