One of the best ways to improve the ROI on your Buncombe County rental property is by taking advantage of all available rental tax breaks. Here is what you need to know about rental property tax breaks in the Asheville area. 

Buncombe County Rental Property Tax Breaks

Here is a short list of some of the expenses for which rental property owners can receive tax benefits: 

• Mortgage or loan payments: If the property is not paid in full, monthly mortgage or loan payments must be made to the lender.
• Property insurance: This protects the property and landlord against potential losses due to fire, theft, or other covered events.
• Property taxes: Taxes must be paid annually on the property.
• Maintenance and repairs: Regular maintenance and repairs are necessary to keep the property in good condition and ensure tenant satisfaction. This may include fixing appliances, maintaining the HVAC system, and keeping the exterior and common areas in good condition.
• Utilities: Landlords may be responsible for paying for certain utilities, such as water and electricity, or they may pass the costs on to the tenants.
• Management fees: If using a property management company, a monthly payment will be charged for their services, including rent collection, tenant screening, and maintenance coordination.
• Advertising and marketing costs: To attract new tenants, landlords may need to advertise their properties, either through online listings, classified ads, or local publications.
• Legal and professional fees: If there is a need for eviction proceedings or other legal action, the landlord will need to pay for the services of an attorney.
• Cleaning and groundskeeping expenses: Regular cleaning and upkeep of the property and grounds are necessary to maintain the property’s appearance and value.
• Miscellaneous expenses: There may be other expenses associated with owning a rental property, such as supplies, equipment, furnishings, and improvements to the property. Landlords must budget for these costs and ensure they have enough reserves to cover unexpected expenses.

Additional Tax Breaks in Buncombe County

Rental properties in Buncombe County, North Carolina, may be eligible for several tax breaks, including:

1. Depreciation: Rental property owners can claim depreciation on their tax return as an expense, reducing their taxable income.
2. Expenses: Landlords can deduct a range of expenses related to their rental property, such as mortgage interest, property taxes, insurance, repairs, and maintenance.
3. Passive Losses: If a landlord has passive losses from their rental property, they can use these losses to offset income from other sources.
4. 1031 Exchanges: Landlords can defer paying capital gains tax on the sale of a rental property by investing the proceeds into another rental property through a 1031 exchange.
5. Low-Income Housing Tax Credits: Landlords may be eligible for tax credits if they provide affordable housing to low-income tenants.

It is important to note that tax laws and regulations are subject to change, and landlords should consult a tax professional for specific guidance on rental property tax breaks in Buncombe County, North Carolina.

Buncombe County Property Management

In the US, property management fees are generally considered a tax-deductible expense for rental property owners. They are considered a necessary expense for managing and maintaining the rental property and can be claimed as a deduction on Schedule E (Form 1040) for income from rental properties. 

It is important to keep accurate records and receipts of these expenses for tax purposes. It is always recommended to consult with a tax professional for specific questions regarding your tax situation.

The tax benefits of hiring a property management company often go a long way toward offsetting the costs. Combined with the potential income gained by the work of the property manager to maximize revenue and occupancy, you could see substantial net income gains.Reach out to us for more information about how property management can help you maximize your investment.