The IRS lets you deduct ordinary and necessary expenses required to manage, conserve, or maintain property that you rent to others. You're allowed to deduct these expenses if your property is vacant, as long as you're trying to rent it.
Expenses are generally deducted in the year you pay them (if you use the accrual method, go here for more info). For example, if a pest-control company serviced your rental in 2023 but you didn't pay them until early 2024, you'd deduct that expense on your 2024 tax return.
Deductible expenses include, but aren't limited to:
- Cleaning and cleaning supplies
- Maintenance and related supplies
- Repairs
- Utilities
- Insurance
- Travel to and from the property
- Management fees
- Legal and professional fees
- Commissions
- Taxes and tax return preparation
- Lease cancelation costs
- Advertising
- Real estate taxes
- Mortgage interest
- Refinance fees and mortgage points are entered in the Assets/Depreciation section instead of the Expenses section. The IRS considers these "amortizable intangibles," which means they must be expenses over the projected life of the asset (or amortized). These don't get expensed or depreciated like tangible assets
- Depreciation
- Entered in the Assets/Depreciation section instead of the Expenses section
