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Updated almost 10 years ago, 01/14/2015
Does my Schedule E look like yours? Ma and Pop landlords
Due to a discussion about filing form 3115, which is evidently required but may not be expected to be complied with, I thought I'd ask if my Schedule E looked normal. (No red flags) First, can anyone link to an article talking about a typical ma and pop landlord schedule e?
Poll?
Do you typically have maintenance and repairs at 5-8-10% of annual rents? (Steve Crossland's PM blog tells his investors to plan on 10-12% of rents per year, but I feel sure he in averaging in roof & hvac over a decade...and maybe carpet over 5 years, which is becoming rather passe.)
Include lawn service? Pest? Provide filters? Filed under maintenance?
Do you manage yourself, and if so how many miles do you write off? Or in dollars, either.
Do you make money after expenses and depreciation? On every property? If not, what market?
Please feel free to add questions.
I actually have my schedule e done but i am not at home...which is why I am leisurely blogging:-). I have no numbers. I use the 10-12% of annual rents to gauge whether my repairs and maintenance seem reasonable and I always claim less. I also try to keep maintenance less than repairs...it is so grey of an area, I just kind of guess. Because I assume there is some kind of IRS algorithm matching zip codes and expense ratios etc and if I think one category looks heavy, I move something. For example, $75 in pickets spread out over a large backyard is maintenance but concentrated on one side where the neighbor's pit bull repeatedly throws himself is a repair. I have no idea what an audit red flag is, but on rentals I will assume most sfr landlords repair but rarely spend large amounts maintaining.
And I claim no management expenses, but my car expenses can be hundreds per property...so I guess that makes sense. I do make weekly trips to water new trees over the summer.
I provide filters for tenants and personally spray once or twice a year and write off the chemicals. I do my house and the in-laws at the same time.
And I have positive cash flow, used to not on the property with flood insurance...$1700 premium this year.