Should you make improvement of rental property to reduce tax ?

[Yenlan Patton]

What would you do to help reducing your taxes with your rental property income ? we have more income from our rental homes this year which is a good thing but other hand we will pay more taxes next year. Any thought. ?

[Joe Splitrock]

@Yenlan Patton I have W2 income that I am living off, so for me it is best if my properties take a tax loss and I can deduct from my W2 income. I would never do unnecessary improvements to get a deduction, but I do keep up on maintenance. For example, I just replaced a 36 year old roof. If was not leaking, but clearly it is at the end of its life. I have houses painted and bad siding replaced. I do deck repairs and landscaping projects that improve water low and reduce maintenance. I have a 35 year old AC unit that I plan to replace this fall. It is still working, but I can get a better price replacing it this fall versus in the middle of next summer, plus no angry tenant call. 

My strategy is to spend money now to keep my properties in great condition, so when I go to retire, there is not deferred maintenance. Once my W2 income is gone, I should have lower tax rate and lower expenses on my properties since they were well maintained. 

Some landlords won't spend a dime on something until it is falling apart. Arguably it increases cash flow in the short term, but that is just not my strategy.