Landscaping and Tax Write-Offs for Rental Properties

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Depending on how much money you’re bringing in from your rental properties, you could be looking at paying as much as 37 percent of your income to taxes each year. Understandably, you may want to reduce that tax burden as much as possible. When you’re looking for possible deductions, you may find yourself wondering, “Can you write off landscaping on rental property?”

The question of what you can write off on your taxes centers around whether the work being done improves the home or maintains it. Read on to learn more about rental property deductions and whether you can deduct your landscaping costs. 

Improvements vs. Maintenance 

Before we dive into the specifics of whether you can deduct landscaping costs, let’s talk about the two types of repair costs for your property: improvements and maintenance. As you might guess, improvements add value to your rental home, while maintenance keeps it in the same state it has been in. Both of these get classified as a rental property expense, but only one is tax deductible.

If you’re making significant improvements to the home you’re renting, you cannot deduct those expenses from your taxes. For instance, if you spend $50,000 renovating the kitchen, you can’t deduct that money. But if you spend $50 replacing the faucet, that falls under the category of maintenance and can be deducted as a necessary cost.

Can You Write Offs on Rental Properties?

The question of whether you can write off landscaping on a rental property depends on how many changes you’re make. As a general rule of thumb, new landscaping cannot be written off on your taxes. Landscaping can raise the value of your home by up to 13 percent, so it would not count as a necessary expense for your property.

That being said, if your property already had landscaping at the time it was last assessed for taxes, you may be able to write off your landscaping costs. Because that landscaping is in place, failing to maintain it would damage the value of your property. Maintaining that landscaping becomes an expense that you can write off.

Is Lawn Care Tax Deductible for Rental Property?

As a general rule, lawn care for your rental property will generally be considered a deductible expense. As with the landscaping question, the determining factor is whether the work is meant to maintain the value of the house or to improve it. If it’s meant to maintain that value, it’s considered a necessary expense. 

Allowing your lawn to go unmowed would damage the value of your property, and depending on where you are and your specific situation, you may not be able to mow the lawn yourself. Because this expense is part of running a business as a landlord, you can deduct it from your taxes. 

Is Tree Removal Tax Deductible for Rental Property?

The question of whether tree removal is deductible can be a little fuzzy, depending on why the tree is getting removed. Trees that have to be removed for safety reasons will be considered a tax-deductible expense. Failing to remove the tree could result in the house being damaged or destroyed, so removing it isn’t a choice.

However, some tree removal may be done as part of a larger overall landscaping effort to improve the value of the house. In this case, since the tree removal constitutes a capital gain on the house, you can’t deduct it from your taxes. You may need to get an arborist to inspect your tree to determine if removing it is a safety necessity or not.

Deducting Property Taxes

Even if you can’t deduct the cost of landscaping or tree removal for your rental property, there are still several other ways you can save on your taxes. One of the most common with landlords and homeowners alike is to deduct the cost of your property taxes. These taxes fall under the realm of necessary expenses to maintain the property and so aren’t an improvement investment you’re making in the house. 

Although personal property tax deductions have a limit ($10,000 if you’re married and filing jointly), business property taxes do not. This means that, even though your rental properties are residential, you can deduct the full amount you paid in property taxes from your income. Given that the average American pays more than $3,000 in property taxes each year, this can be a major deduction.

Deducting Mortgage Interest

In addition to deducting your property taxes for your rental properties, you can also deduct mortgage interest from your taxes. Interest is the fee you pay your lender for the privilege of borrowing the money to buy your property. In the early years of your mortgage, you may pay more in interest than you actually do to the principal on the loan.

Although mortgage interest can be costly, you can deduct that expense from your taxes. This means that, as long as you have a tenant who covers the cost of your mortgage, you’re getting a loan for free. You don’t have to count the money you pay toward interest as income, so you get out tax-free and can collect a lot more profit.

Learn More About Rental Property Deductions

Landscaping can be expensive, and you may find yourself wondering, “Can you write off landscaping on rental property?” As long as the landscaping is maintaining the value of your property, not improving it, you can write it off. The same goes for lawn care and tree removal – any necessary expense for maintaining the home can be deducted.

If you’d like to learn more about rental property deductions, check out the rest of our site at Nomadic Real Estate. We can help you with leasing, management, sales, and, most importantly, peace of mind. Learn more about our property management services today and discover how we’ve helped thousands of landlords throughout D.C., Maryland, and northern Virginia.

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Enhanced Reporting

Your portal includes a selection of extremely useful reports. Reports are available in the “Reports” section, and are distinct from the financial statements. Unlike financial statements which are static records, Reports are dynamic real-time records that will update with current data every time you view them. 

Scroll down to learn more about Reports:

Navigate to the "Reports" module in your portal:

Owner Portal Reports
  • Keep in mind, these reports are dynamic records. They will refresh to display current information every time you view them. 

Enhanced Rent Roll Report:

Enhanced Rent Roll Report
  • The Enhanced Rent Roll Report will show the rent amount, last payment date, move-in date, lease expiration date, and security deposit amount for each of your tenants. 
  • It will also show a portfolio summary with occupancy percentage, vacancy loss, and more!

Unit Comparison Report:

Unit Comparison Report
  • If you own multiple units (or buildings) with Nomadic, you’ll get access to the Unit Comparison Report. 
  • This report enables you to quickly compare financial performance between your units at a glance without toggling between individual reports. 

Income Statement Month-Over-Month:

Income Statement by Month Report
  • The Income Statement Detail – Monthly Report serves as a month-over-month record of portfolio performance. You’ll see itemized income and expense categories and can track monthly. This report will update with fresh data every time you view it. 

Financial Statements

Financial statements will be published to your portal on a monthly basis. The statements are found in your Documents library, and provide a historical record of all financial performance. The statements serve as a snapshot of financial performance over a given period, and are static documents (unlike Reports, the statements do not update/change in real-time). 

Scroll down for more info about the Financial Statements in your Documents library:

The Documents area contains monthly financial statements:

Owner Portal Documents
  • The statements in the Documents are are static documents. They are posted to the portal once a month to serve as a historical record of financial performance. 

Download a statement to see month and YTD financials:

Owner Portal Property Statement

You'll also find a month-over-month operating statement:

Month over Month Statement

Portal Communication Tool

You can use your owner portal to communicate with our team. Any messages you send through the portal will go straight to your Account Manager. When we reply, you’ll get an email notification and you’ll also see the message in your portal next time you log in. 

Here’s an overview of using the communication platform:

Click "Communications" and navigate to "Conversations":

Commincation Dashboard Screenshot
  • The communications module will contain a record of all messages that you create through the portal. 

Click the "New Message" button and send your message:

Owner Portal New Message Screenshot

Responses will show up in the conversation ticket:

Portal Conversation Response Screenshot
  • You’ll get an email notification whenever you get a response, and you’ll also see the message in your portal next time you log in. 

You can reply in-line using the comment box:

Owner Portal Comment

Each conversation will be logged in its entirety:

Portal Conversation Snapshot

Understanding the Ledger

Your portal includes a ledger with all transactions. The ledger is populated with data in real-time as transactions flow through our accounting software. Much of this information is also available in the Reports area, as well as the Statements in your Documents library, but the ledger is the most comprehensive resource for diving into the details. 

Please scroll through the sections below to get a better understanding of how to interpret the ledger. 

By default, transactions are sorted chronologically:

Owner Ledger Dates
  • The date reflected in the lefthand column is the actual transaction date, not the “bill date”. This is the date the transaction was actually processed. 

If you have multiple properties with Nomadic, you'll see the address for each transaction in the "Location" column:

Ledger Property Column
  • You can filter the ledger to look at just one property, all properties, or specific sets of properties. 
  • If you only have one property with us, you’ll just see the ledger for that property. 

The Description column displays the transaction type:

Owner Ledger Description Column
  • BILL: this is an expense transaction, such as for repair costs or management fees.
  • CHARGE: this is a transaction  billed to the tenant, most typically a rent payment. 
  • NACHA EXPORT: this is a credit we processed to your distribution account. This type of transaction is how you get paid! 

The Amount column shows the dollar value of each transaction:

Owner Ledger Amount Column
  • Positive Amounts: if an amount is positive, it reflects a transaction that is payable to you. Typically, this will be a rent payment that we collected from your tenants. On occasion, a positive number could also signify a journal entry or credit adjustment. 
  • Negative Amounts:  if an amount is negative, this is a transaction that is either payable to Nomadic or is an amount that has already been paid to you. Typically this will be for repair costs or management/leasing fees. Owner draws (net distributions into your checking/savings account) also reflect as negative amounts, since they have already been paid to you. 

The Account Balance column shows a sum of positive/negative transactions at a given point in time:

Owner Ledger Account Balance Column
  • Account Balance should always equal zero after a net distribution has been processed. When the balance is zero, this means that all expenses have been paid and you’ve received the remainder as net operating income, leaving a balance of zero (meaning: no one is due any money, as all funds have been distributed appropriately). 

Navigating the Propertyware Owner Portal

Your portal includes some extremely useful features that help you understand your property’s financial performance at a new level, with real-time transparency into every transaction.

Scroll through the snapshots below for an overview of portal navigation! If you need more help or have specific questions about using the portal, you can reach out to your Account Manager any time for a screen share. 

You can filter all info by date range or property:

PW Portal Filters

View a snapshot of income and expenses on your dashboard:

PW Owner Dashboard View

See every transaction in real-time on your ledger:

Owner Portal Ledger View

Statements and forms will be posted to your documents library:

Owner Portal Document Library

View a suite of real-time financial reports:

Portal Reports View

See a running list of all bills, and drill down for more detail:

Owner Portal Bills View

Under Bill Details, you'll find dates/descriptions/amounts and more:

Portal Bill Details

You can also communicate with your Account Manager through the portal:

Owner Portal Communication Tools

How do net distributions work?

Net distributions keep your accounting clean and simple. Each month we’ll collect rent from the tenants, deduct any repair expenses for the previous month and any management/leasing fees for the current month, and credit the remaining net operating income to your account. 

Net Distribution

You’ll receive a statement via email each time a net distribution is processed, and can view all transaction details in your Propertyware owner portal.