You can feel it in the air. Fall is here. And, with the change in seasons,
comes a variety of extra chores for landlords. But even for those of you who
live in warmer climes, now also is the time to look back at the past year and
prepare for the next.
To help you, we’ve prepare this handy checklist to keep track of your year-end
progress. With it, you won’t lose sleep over your rental properties, whether
you’re a newbie landlord or the grizzled veteran of many seasonal campaigns.
(For your convenience, we also offer a handy
PDF of this checklist that you can download and print.)
Business Affairs
Joel A. Herman, C.P.A. and Director at Ostrow Reisin Berk & Abrams, Ltd.,
offers the following general business suggestions and tax tips for the fourth
quarter:
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Get your 12-month records organized "early" to see where you stand. Knowing
what your income and expenses totals will be can help you plan year-end
activities. You’ll also be better equipped for putting the numbers on paper and
preparing your tax return once the year is over.
-
Consider prepaying your January mortgage payment in December to accelerate the
interest deduction.
-
There are a number of accelerated depreciation incentives available. If
applicable, consider making some equipment purchases (appliances, cabinetry,
etc.) this year instead of next to accelerate the deduction.
-
Closely scrutinize the classification of expenditures: Are they capitalized
items or expense items? Expense items are deducted 100 percent when you buy
them, but capitalized items are depreciated over time.
-
Consider refinancing if the interest rate you currently have is too high or if
you need cash for rehabbing.
-
Control your net income by timing bill payments. Do you need net income (in
order to take some of the accelerated depreciation) or net losses (if the
passive losses are deductible by you)? Act accordingly by either paying all
bills by December 31, perhaps even accelerating some January payments into
December, or deferring the expense by paying all your December bills, and
perhaps even November’s bills, in January.
-
Be creative in structuring your leases. Income can be deferred by giving rent
abatements up front and catching up with higher rents later. Of course, you may
want to do the opposite if you think tax rates are increasing or if you think
you’ll be in a higher tax bracket next year.
Building Maintenance
Here are some tips on general maintenance that landlords everywhere should take
care of on their investment properties during the final quarter of the year:
-
Take stock of the repairs or upgrades your rental units need. What needs to be
done now and what can wait until spring?
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Check hot water heaters, windows and roofs.
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Attach storm windows, if necessary.
-
Repair windows or roofs, if necessary.
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Caulk and paint the exterior, if necessary.
-
Clean the gutters. In cold climates, as they freeze and thaw, leaves can
actually damage the gutters themselves. In warmer areas, leaves can clog the
gutters and prevent them from carrying water, which results in flooding or roof
damage.
-
Test furnaces and change filters. Change filters at least twice a year.
-
Test carbon monoxide, smoke and radon detectors to make sure they work and that
the batteries are fresh.
Yard Tasks
-
Rake and dispose of leaves per local laws.
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Trim back evergreen bushes and roses.
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Cover roses and other tender plants with leaves or Styrofoam cones.
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Cut down the stalks of perennial plants as needed for new growth in spring.
Pull out the dead annuals.
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Clean and oil trimmers and other yard tools and store them in a dry space.
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In colder climates, cut grass for the last time.
-
Clean out the lawn mower. Remember to empty the gas tank and remove the battery
before you store the mower for the season
Snow Removal (if necessary)
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Buy an appropriate quantity of salt for the sidewalks and steps of each
building. Make sure you have a good shovel. Store these items where they can be
reached easily.
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Decide who will do snow removal at each property. Will you do it yourself, hire
a service or recruit a tenant?
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Schedule your snow removal efforts. After a storm, will your property be
cleared in an hour, a day, a week? Also, are there local ordinances you need to
comply with?
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If you’re not doing it yourself, decide how to check for quality control on the
snow removal efforts. You don’t want to pay for service that you aren’t
getting.
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Put out rugs or mats as necessary in the entryways of your buildings. They will
save wear and tear on the carpet and prevent people from slipping on wet
floors.
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