In order for your rental property to be attractive to prospective renters, it should be found in good and presentable order. These expenses can be deducted against the income received from this property provided they meet the business use requirements. Let’s look at landscaping, hired help, and HOA fees.
For more information, please review IRS Publication 527 for current regulations.
The seasonal maintenance of the property such as grass trimming, floral arrangements, and other weather related tasks can be applied to the rental income for the property. In some of these services you may be required to pay for the cost of the plants, shrubs, etc. Most of these types of services are performed similar to your main home landscaping, however these costs are limited to only the portion of time in which the property is not personally used.
This type of cost is usually for such services as property security review, greeting new renters, and even a concierge type of service such as a tour guide for the local area. This service should be set forth in an agreement between yourself and the parties involved, and can be expensed against the revenue of the property during allowed rental days. Please note that these services should not be used in return for rental use otherwise it would be classified as personal use days since you had a material benefit from this. It is important to note that these payments may need to be reported under a 1099 if they exceed the $600 threshold. Because of this when using hired help, it is usually best to use a service organization which would handle some of these requirements.
HOA (Home Owners Association)
Since these types of dues assessments are usually periodic, they can be used to offset the income from the rental property. Many of these associations perform services use as property maintenance, administration services, etc. It is important to note that these services along with others related to them can only be deducted if they are not personally used. Also note that some services which are offered by these HOA’s should not be duplicated in other areas such as landscaping and hired help. Using an HOA can be a benefit since most of the services needed to maintain and run your property can be managed by them as a bundled service assessment fee.
Redmond CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.