If you own rentals in Southern California, keeping expenses organized is one of the simplest ways to protect your returns. The issue isn’t usually missing deductions—it’s messy records, lost invoices, and unclear categorization.
This checklist is designed for owners with rentals in one county or across multiple counties, with a simple system you can follow year-round.
Start With Two Buckets
- Operating expenses (ongoing): costs to run and maintain the property during the year.
- Capital improvements (long-term): upgrades that extend life or materially improve the property—often depreciated over time.
Common Deduction Categories (Discuss With Your CPA)
- Mortgage interest and certain loan fees (keep statements + closing docs)
- Property taxes (annual bills + proof of payment)
- Insurance premiums (landlord policy, umbrella coverage if applicable)
- HOA dues and assessments (common in SoCal condo/townhome markets)
- Repairs and maintenance (plumbing, electrical, paint, landscaping, pest control, HVAC servicing)
- Owner-paid utilities (water/sewer/trash; common areas for multifamily)
- Property management fees (management, leasing, renewals—keep statements)
- Advertising and leasing costs (photos, listings, screening fees when owner-paid)
- Professional services (CPA, legal consults, bookkeeping, software)
- Travel and mileage (when eligible—track date, purpose, miles)
- Depreciation (your CPA sets this up; keep purchase and improvement records)
The Simple Record-Keeping System (Works Across Counties)
- Create one folder per property with subfolders: Repairs, Utilities, HOA, Insurance, Taxes, Lease Docs.
- Save every invoice + proof of payment (receipt, bank record, portal statement).
- Add one line to each invoice: what it was and why it was necessary.
- Tag big projects as “Review for capital improvement.”
- Store move-in/move-out photos and inspection notes to support tenant-damage items.
Quick Win: Make Your Statements Match Your Folders
If your statements categorize expenses consistently, tax time gets easier. Whether you selfmanage or use a manager, aim for clean categories that map to your folder structure.
Want a Realistic Rent Estimate? Choose Your County
For local rent estimates, service areas, and next steps, choose your county. If you own rentals in multiple counties, schedule one call and we’ll route you internally.
