Landlords’ Guide to Preventative Maintenance

Preventative Maintenance

As a landlord, maintenance is usually your financial responsibility. Therefore, unless you rent commercial properties with a specific lease type that exempts you, routine maintenance should be one of your top concerns.

But what exactly is routine or preventative maintenance? It’s important to understand the goal of maintenance before hiring contractors or entering your tenants’ homes. 

One strategy is to prepare a checklist of tasks to complete each time you enter a unit. By following your checklist while inspecting your properties several times a year, you can be sure your units are safe and in good condition.

Here is a brief overview of preventative maintenance and how to implement it in your property management business.

What is Preventative Maintenance?

In essence, preventative maintenance is about fixing problems before they occur.

It includes any routine work you do on your properties to maintain their condition. For example, preventative maintenance often involves replacing or cleaning parts, testing alarms, and verifying that appliances are working properly. 

Preventative maintenance is necessary because it catches the subtle effects of wear and tear before they evolve into larger problems or even disasters. For instance, noticing and fixing a minor faucet leak can prevent an entire basement from flooding down the line.

What is Involved?

Your preventative maintenance checklist should vary depending on the specific appliances and utilities in your units. However, it usually includes the following tasks:

  • HVAC servicing and filter replacement
  • Paint touch-ups
  • Inspections
  • Patching drywall holes or cracks
  • Testing smoke and carbon monoxide detectors
  • Cleaning appliances
  • Clearing gutters, fireplaces, or chimneys
  • Investigating plumbing for water damage
  • Servicing the septic system

How Often Should I Do Preventative Maintenance?

There is no one right answer to how often you should inspect your properties for routine maintenance. Some tasks will need to be done seasonally (e.g., once every year before winter), while others might be done quarterly or even every few months. 

You’ll also need to inspect your units during move-in and move-out. This step is essential for assessing damage to the property and determining what your tenants are and aren’t financially responsible for.

It’s up to you to devise a flexible checklist and a reasonable timeframe for implementing it. 

Which Tools Are Available?

Even if you don’t hire an independent maintenance contractor, you can still use your resources to help you with routine maintenance.

One such tool is the maintenance management feature on your rental management software. This tool allows you to record and document what maintenance has been done to which properties and when. You can also use it to assign maintenance tasks to your employees and monitor when jobs are completed.

Tax Deduction Benefits

Another benefit of preventative maintenance is that there are always excellent tax deduction benefits available for it.

According to the tax code, preventative maintenance is currently fully deductible. This means you can subtract the cost of any preventative maintenance tasks (inspections, replacing filers, cleaning, etc.) from your rental income and reduce the total amount you pay tax on.

Like preventative maintenance, repairs are also fully deductible. If you repair any units of property—that is, you restore the property to its original, working condition—you can fully deduct the expense from your income as an operating expense.

Tax deductions are wonderful news for landlords looking to generate more revenue from their rental units. However, to use the preventative maintenance deduction (or any deduction), you must keep accurate records. 

This means carefully recording expenses, saving invoices, and documenting the details of each maintenance task you perform. If you list the expense correctly on Schedule E, you shouldn’t have to worry about an audit. However, if the IRS does audit you, you’ll already have all the records to prove that you were justified in taking the deduction.

Making Preventative Maintenance a Habit

Preventative maintenance is one of the best habits you can develop as a rental property owner. If you want your properties to appreciate over time, you must take good care of what you invested—including regularly servicing all appliances, building structures, furniture, and other assets. By following the above tips and maintaining infallible records, you can keep your rentals in top shape and seize the best tax deals while you’re at it.

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BSV Staff

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