How to charge for landlords' time? (tenant, renter, security deposit, record)
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I have a small rental unit. My tenant recently moved out and I had bunch of repairs to be done. I have saved the receipts and invoices which will be deducted from the security deposit. However, many of the repairs were not straight forward. I had to go from pillar to post-had lot of leg work and going around. I was wondering what about the miles I am putting and the time I am spending in getting things repaired? Please let me know how you have done and what are the acceptable and legal ways to fairly charge for my miles and time?
You get rent and a security deposit, you do not get hourly wages to repair and maintain your rental for the next renter. The repairs are tax deductable and your time/miles are part of being a landlord and doing business.
Generally, legitimate expenses offset income... either as a deduction in the year incurred or over time.
When I was starting out... an older and wiser landlord told me he no longer works at his rental property and spends his time on the home he lives in.
His reasoning is every dime spent on the rentals for improvements, repairs and maintenance is an offset against income.
If he were to hire people to work on his home... he might recoup some of the money towards improvements to offset capital gains at the time of sale... whenever that might be.
If you have limited time... maximize your time by hiring out work at the rental and keeping meticulous records...
Last edited by Ultrarunner; 10-18-2012 at 11:04 AM..
If you charge a tenant for anything, you better have an invoice or a receipt to prove it. If you want to be able to charge for time, then hire a handyman to do the work. Be sure to 1099 him at the end of the year.
If it isn't damaged by tenant, you can't charge them for it out of security deposit. Normal wear and tear of items aren't something that should come out of security deposit.
If tenant is asking for nitpicky little things to get fixed, you don't have to comply unless a the item MUST be fixed per state landlord tenant laws. For example, let's say you have an old faucet that works perfect but it is tarnished or maybe the sink sprayer part doesn't work. You don't have to replace it and it's not something that tenant damaged either. If you choose to fix things like this, it's on your dime.
Maybe tenant is asking for security flood lights that turn on when someone walks on the porch because they don't always remember to turn the light on when doing outside . This isnt something a landlord would typically install per tenant's request.
This is excerpted from the State of California Landlord/Tenant handbook
If the landlord or the landlord’s employees
did the work—The itemized statement must
describe the work performed, including the
time spent and the hourly rate charged. The
hourly rate must be reasonable.
Another section reminds landlords that only tenant caused damages are chargeable against Security in addition to unpaid rent and the cost of cleaning to the condition at move in less normal wear and tear.
In CA, I -believe- (I'd have to go look up my last S/D return documents...) the max is $20/hr, as I was told by my association. So when we had to fix items they broke (or things we had to change back bc they did not have permission to change things), we charged for the labor to do it as well.
It depends entirely upon what state the rental unit is located in.
In some states you can't charge for your time. In some states you can. You really should know your local landlord tenant law if you intend to have rentals.
In states where you are allowed to charge for your time, you can not charge more than the going rate for that type of repair.
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