Becoming a Landlord Test tips
Chapter 6: Taking Care of Your Financial Responsibilities
You should know and understand the following points covered within this chapter:
- The steps to prepare an operating budget for your rental property include:
- determining your monthly rental income
- determining your monthly expenses and cash reserves
- comparing your total monthly income and expenses
- Property insurance, tenant relocation insurance, flood insurance, "rent loss" insurance and liability insurance are types of insurance are available to you as a landlord to protect you in emergencies.
- Tax deductions that may be available to landlords include:
- repairs and routine maintenance costs
- depreciation, advertising, wages and fees
- utilities, property taxes and tax preparations
- You may get a special tax treatment by keeping track of the amount of each expense, who receives your payment and the date on which you incur/pay the expense.
- The IRS (Internal Revenue Services) requires you to separate expenses associated with the part of your house that you rent out from those associated with the part in which you live.
