A rental property roof replacement must be timed correctly. You have to consider availability of funds, convenience of your tenant and your tax-year plans. Here are a few tips on how and when to plan your rental property roof replacement to receive the greatest return on your investment.
How Long Are You Holding the Property?
First of all, know when the last full tear-off roof replacement was completed on your rental property. Next, sketch out a timeline of your ownership of the building. Do you plan on keeping the property for more than 10 years? If not, you might never have to do a full replacement, depending on the current state of the roof. If it is in relatively good condition when you prepare to sell, only a few minor repairs may be necessary.
However, if you plan on keeping your rental property for more than a decade, you should replace the roof at some point during your ownership. Buyers will want a new roof, or one as close to new as possible, so hold off on a complete replacement until it is vital, or until right before you sell.
Allot Monthly Funds for Roof Replacement
Spread out the cost of a roof replacement over a few years to avoid getting hit with the cost all at once. A $10,000 roof replacement is only about $277 per month, spread out over three years. If you are profiting from your rental property income, it is a wise decision to place profits in a separate account dedicated to making major property updates.
Stay in Tune With its Condition
No matter how considerate your tenants may be, they might not always report a missing shingle when they see it. In fact, they might not notice roof damage at all until a leak appears. It is up to you to keep tabs on the state of your rental property. Drive by at least once a season to check the roof’s condition and make sure no tree limbs are touching it or poised to fall on it. Any time you must enter the property to fix a problem for a tenant, take a look at the roof while you are there.
Keep Taxes in Mind
The IRS distinguishes between repairs and replacement. Making repairs is an immediate tax write-off. You will receive the full benefit in that tax year. Replacing a roof is considered a capital improvement to the property, and only a percentage of the cost can be deducted each tax year, though in subsequent tax years you will also receive depreciated tax benefits. If a replacement is necessary, you can utilize that expense for tax write-off purposes for the entire “useful life” of the improvement.
Get in touch with Knockout Roofing for a rental property roof replacement quote when you need qualified, experienced roofing advice.