What Expenses Can First-Time Landlords Deduct?
If you’ve recently become a landlord, one of the first questions you’ll ask is simple: what expenses can first-time landlords deduct?
The IRS allows rental property owners to deduct ordinary and necessary expenses related to operating and maintaining their property. But knowing what qualifies — and keeping your records organized — is what turns confusion into confidence.
According to IRS Publication 527, rental expenses must be ordinary, necessary, and directly related to managing, conserving, or maintaining your property.
Let’s break down what that means in practical terms.
What Expenses Can First-Time Landlords Deduct Most Often?
Most deductible rental property expenses fall into a few core categories. These are the items new landlords encounter most frequently.Common Rental Property Tax Deductions
Mortgage Interest
If you have a loan on your rental property, the interest portion of your mortgage payment is typically deductible.
Your lender will send Form 1098 each year showing how much interest you paid. For many landlords, this is one of the largest annual deductions.
Property Taxes
State and local property taxes paid on your rental property are deductible as a rental expense.
These are separate from HOA fees and should be tracked independently throughout the year.
Insurance Premiums
Landlord insurance premiums are deductible. This may include:
- Hazard insurance
- Liability coverage
- Flood insurance (if required)
If you carry an umbrella policy, only the portion related to your rental activity may qualify.
Repairs and Maintenance
Repairs that keep your property in good operating condition are generally deductible in the year you pay for them.
Examples include:
- Fixing a leaking faucet
- Replacing a broken appliance
- Patching drywall
- Painting between tenants
We’ll explain the difference between repairs and improvements below — because it directly affects how and when you deduct the expense.
Operating Expenses You Can Deduct
Beyond property-related costs, there are operational expenses involved in managing your rental.
Common deductible operating expenses include:
- Property management fees
- Advertising for tenants
- Legal and accounting fees
- HOA fees
- Cleaning services
- Landscaping
- Pest control
- Utilities (if you pay them)
As long as these costs are directly related to operating your rental property, they are generally deductible in the year they are paid.
If you own more than one property, expenses must be separated by property. Keeping categories organized throughout the year makes completing Schedule E significantly easier at tax time.
Often Overlooked Rental Deductions
Some deductions are frequently missed — not because they’re complicated, but because they aren’t tracked consistently.
Mileage
If you drive to:
- Inspect your property
- Meet contractors
- Pick up supplies
- Handle tenant-related issues
Those miles may be deductible.
The key is maintaining a log throughout the year rather than trying to estimate mileage later. If you’re unsure how to do that properly, review How to Track Rental Property Mileage.
Depreciation
Unlike repairs, the cost of the property itself (excluding land) is not deducted all at once.
Instead, it is gradually written off over time through depreciation.
Depreciation is often one of the largest rental property deductions — but it requires accurate purchase records and documentation. We explain this in more detail in Depreciation for First-Time Landlords.
Repairs vs Improvements — Why It Matters
This is one of the most common areas of confusion for first-time landlords.
A repair keeps your property in good working condition and is typically deductible in the current year.
An improvement adds value, prolongs the property’s life, or adapts it to a new use — and is usually depreciated over time.
Examples:
- Fixing a broken window → Repair
- Replacing all windows → Improvement
- Patching a roof leak → Repair
- Replacing the entire roof → Improvement
Understanding the difference prevents reporting errors and avoids unexpected adjustments later. For a deeper breakdown, see Repairs vs Improvements for Rental Property Owners.
Why Tracking Expenses Monthly Matters
The deductions themselves are not complicated.
What creates stress is trying to reconstruct 12 months of expenses at tax time.
When income and expenses are organized monthly, tax preparation becomes a reporting exercise — not a reconstruction project.
If you’re unsure where to begin, start with How to Track Rental Income and Expenses.
A structured filing method like How to Organize Rental Receipts and Documents prevents last-minute scrambling.
A simple monthly tracking system keeps your rental organized year-round and eliminates tax-season reconstruction entirely.
The Goal Isn’t Just Deductions — It’s Confidence
Most first-time landlords aren’t trying to aggressively maximize write-offs.
They’re trying to make sure they’re doing things correctly.
When your income and expenses are categorized consistently throughout the year, tax season becomes predictable.
And predictability builds confidence.
If you want a structured monthly framework designed specifically for first-time landlords, review the RentalStructure System.