A rental property roof replacement is one of the biggest renovations you can undertake. You want to make sure you plan for this project to gain the maximum benefit over time.
You have to abide by your duty as a landlord to keep the home leak-free, but you also want to get the most value from your roof. You need guidelines to help you know when it’s the right time to replace the roof on a rental property.
Symptoms of Roof Problems
First, identify the problems. If the following describes your roof, repairs may be the best option:
●A few missing shingles or pieces of flashing
●Damage to one small area
●Fairly recent installation
You may need a roof replacement if:
●Damage extends across multiple roof sections
●The roof has already undergone a series of repairs
●There’s a structural problem
●Repairs are needed and your roof is old
The best way to decide if you should opt for repairs or a replacement is to get an opinion from an experienced roofing contractor. They will conduct a full assessment of the roof and give you
estimates for each option.
Repairs vs. Improvements: Know the Difference
When you’re financing a rental property roof replacement, you have to be conscious of one major financial distinction that could play a big role in your tax filing: a rental property roof
replacement is considered a home improvement, not a home repair.
What does this mean?
The total cost of rental property repairs can be deducted from your taxes in full in the tax year
they were paid for. The total cost of rental property improvements is spread out over the course of their useful life, typically 27.5 years. If you pay for a $10,000 replacement, you are making an improvement to your property. You will be able to deduct $363 the first tax year, not the whole $10,000.
Are You Gearing Up to Sell?
If you’re planning on selling your rental property within the next year or two, a new roof is a
good investment. It will raise the value of your home and enable you to make a larger profit from the sale.
Do You Plan on Holding the Property Long-Term?
If you plan to continue to rent the property for years to come, you don’t want to spend too much money on repairs if you will eventually need a roof replacement. But you also would probably appreciate a few years to save money before you pay for the project. Talk to your contractor and see if you can delay a rental property roof replacement with a few smart repairs while you save up.