When you own a rental property in Los Angeles, the IRS gives you a long list of things you can legally deduct to lower your tax bill. The trick is knowing what’s on that list and making sure you claim every dollar you’re entitled to.
So grab a snack, because we’re about to take a (tax) bite out of your expenses.
1. Mortgage Interest: Still the Big Cheese
Got a mortgage on your rental property? Good news, the interest you pay is 100% deductible.
This one’s a heavy-hitter. For most landlords, mortgage interest is their biggest write-off. In fact, the average mortgage interest deduction is over $9,000 per year for rental owners in the U.S.
Just make sure the loan is tied to your rental and not your primary residence.
2. Property Taxes: Yes, LA, You Can Deduct These Too
California may not go easy on property taxes, but the IRS is a little more forgiving. You can deduct the entire amount of property tax you pay on your rental unit.
Keep those tax bills filed. They’ll come in handy.
3. Repairs vs. Improvements: Know the Difference
Here’s where things get tricky (and where many landlords mess up).
Repairs, like fixing a leaky faucet or patching drywall, are deductible in the year they happen.
Improvements, like replacing the roof or upgrading to granite countertops, have to be depreciated over time.
Want to stay on the IRS’s good side? Label your receipts properly.
Plus, the IRS loves clarity. Call that $400 bathroom fix a “plumbing repair,” not a “refreshing spa upgrade.”
4. Depreciation: The Secret Deduction
You can’t write off the price of your rental property all at once. But you can spread the cost out over time using depreciation.
The IRS lets you depreciate residential rental property over 27.5 years. So if you bought a building for $550,000 (land value excluded), you’d get about $20,000 in deductions every year.
Even better? Depreciation is a non-cash deduction, it reduces your taxes without reducing your bank account.
Magic? No. Just math.
5. Utilities: Deduct What You Cover
If you pay for utilities, water, trash, gas, internet, for your tenants, those costs are deductible.
Don’t skip this one. In LA, even just covering water and trash could mean hundreds per year off your tax bill.
Bonus points if you keep your receipts organized and sorted by category. The IRS loves a neat landlord.
6. Home Office: Yes, Even for Landlords
Do you have a dedicated space where you manage your rentals? File paperwork? Answer tenant texts at 11 PM?
Congrats. That’s a home office.
And yes, it’s deductible.
You can claim a standard deduction of $5 per square foot, up to 300 square feet. Or, if you’re extra organized, calculate your actual costs (internet, electricity, etc.). Either way, don’t leave this money on the table.
7. Insurance: Peace of Mind and Tax Relief
Your landlord insurance premiums are fully deductible.
That includes coverage for fire, flood (yep, even in LA), liability, and even umbrella policies.
Did you know? Average landlord insurance in California runs about $1,756 per year. That’s a chunk of change , and a solid deduction.
8. Professional Services: A.K.A. “Help is Deductible”
Paid a lawyer to draft your lease?
An accountant to file your taxes?
A property management company to handle your tenants?
All deductible.
This includes bookkeeping, legal consultations, tax prep, and even pest control contracts. The IRS knows running a rental is work, and they let you deduct the help you hire.
9. Travel and Mileage: It All Adds Up
Live far from your rental? Make trips to the property for maintenance or showings? That’s deductible mileage.
In 2025, the standard mileage rate is 70 cents per mile. Drive 1,000 miles a year for rental errands? That’s $655 in deductions just for getting behind the wheel.
(Your podcast playlist doesn’t count as a business expense, though. Sorry.)
10. Tenant Screening Costs: Small Fees, Big Write-Offs
Background checks, credit reports, and application screening platforms all count.
Even small charges like $20 per application add up over the year, especially if you’re managing multiple units or high turnover.
Don’t Forget the 1099 Rule
If you paid any contractor, handyman, or vendor over $600 in the year, the IRS wants to know.
You’ll need to file a Form 1099-NEC for each one. Keep records of payment, get their W-9s early, and stay ahead of the January deadline.
Bonus: What About LA’s Local Rules?
Good question. LA has its own rent control laws and tax nuances. If you’re managing older buildings or participating in affordable housing programs, you may qualify for additional credits or deductions.
Always check with a local tax pro, or better yet…
Meet Landon Pacific Property Management
Want someone else to keep track of these deductions while you focus on your life (and maybe a mimosa or two)? We, at Landon Pacific Property Management, have your back.
From rent collection to expense tracking and detailed reports, we make tax season less taxing. Our team knows LA inside and out, from Santa Monica bungalows to Eastside walkups.
We help you stay compliant, stay profitable, and yes, stay sane.
So, instead of googling “Can I deduct my tenant’s emotional support llama?”
Call Landon Pacific. We’ve probably seen it all.
Final Thought
Tax deductions are part of your business strategy.
Get familiar with what you can write off. Keep great records. And when in doubt, call in the pros. Because in 2025, smart landlords don’t just collect rent, they collect deductions, too.
Need help with your LA rental?
Get a free, no-obligation rent analysis for your property — usually within 24 hours. Boutique, owner-managed property management based on Fairfax Avenue, just minutes from Beverly Hills.
