10 Facts Every Landlord Should Know

Ten must-know facts that save time and money and keep you on the right side of the IRS and your state's landlord-tenant rules. Here are 10 that belong on every landlord's radar. For deadlines and a full checklist, use our Tax Prep Checklist; for depreciation and improvements, see Depreciating Assets; for legal basics, see Legal Compliance and Security Deposits.

1. Most landlords miss deducting mileage

The IRS allows a standard mileage rate for business driving—72.5¢ per mile in 2026 (70¢ in 2025). Trips for inspections, tenant meetings, and supply runs count. Many landlords don't track miles and leave hundreds or thousands of dollars on the table. Keep a simple log and claim it; see the IRS standard mileage rates and our Tax Prep Checklist.

2. 100% bonus depreciation is back

For qualifying property placed in service after January 19, 2025, the IRS again allows 100% bonus depreciation in year one. That means new appliances, HVAC, carpet, and certain improvements can be written off fully in the year you place them in service—no 5- or 7-year spread. See our Depreciating Assets guide and the Tax Prep Checklist for how it fits your return.

3. Most tenants prefer paying rent online

According to the National Multifamily Housing Council, a majority of renters prefer digital payment methods over checks. Landlords who offer online (and in some markets, crypto) options often see faster payments and fewer late or lost checks. Offering a modern rent-collection option can improve cash flow and reduce follow-up.

4. Security deposit rules vary by state

Some states require you to pay interest on deposits; others set maximum amounts and strict return timelines. Missing a deadline or holding too much can lead to penalties or lawsuits. Get the basics in our Security Deposits guide and Legal Compliance; check your state's rules before accepting a deposit.

5. A tiny pipe crack can waste 250+ gallons of water per day

According to the American Red Cross, a 1/8-inch crack in a pipe can release more than 250 gallons of water per day. Winter notices and heat requirements aren't just paperwork—they help prevent frozen pipes and some of the costliest insurance claims. Keeping the property heated and addressing leaks quickly protects your asset and your tenants.

6. Pay a contractor $600+ without a 1099-NEC and you risk IRS penalties

If you pay an unincorporated contractor $600 or more in a year and don't issue a 1099-NEC, you can face IRS penalties (e.g. $60–$310+ per form depending on how late). Get W-9s before you pay so you can file correctly. Deadlines and steps are in our Tax Prep Checklist.

7. Residential rental buildings are depreciated over 27.5 years

The structure (not the land) is depreciated over 27.5 years under IRS rules. Land is not depreciable. How you allocate purchase price between land and building affects your depreciation deduction every year. Our Depreciating Assets guide walks through the 27.5-year rule and how it fits with bonus depreciation and repairs.

8. Property management and rent-collection software are fully deductible

Property management software and rent-collection tools are 100% tax-deductible as ordinary business expenses. Subscriptions and transaction fees reduce your taxable income. Include them in your records and on your Tax Prep Checklist so you don't miss the deduction.

9. Eviction costs often run $3,000–$10,000+

Industry and legal sources estimate that eviction costs vary by state but often run $3,000–$10,000+ when you include lost rent, court fees, and turnover. Screening tenants well and enforcing lease terms consistently reduce the odds you ever need to evict. When you do, follow the law: proper notice, no self-help, and Legal Compliance and your state's eviction process matter.

10. Landlords with 10+ units often see higher returns through systematization

Scaling isn't just more doors—landlords with 10+ units often see meaningfully higher returns by using software, checklists, and consistent processes. Rent collection, maintenance tracking, and tax prep become repeatable instead of chaotic. Building systems early makes growth sustainable.