Repairs and Improvements
Repairs keep the rental property in good condition. Repairs do not increase value of the property or usually significantly extend its life. The following are examples of repair
- Repainting the property inside and out
- Fixing leaks
- Plastering
- Fixing or replacing broken windows
- Fixing floors or gutters
If repairs are made as a part of a wide ranging or extensive remodeling of the property, the whole job is an improvement.
Example: Bill purchased a house. The house was in need of many repairs such as repainting, replacing broken windows, replacing roof tiles, and plastering. After several months to complete the repairs, Bill was finally able to place the property on the market for rent. The remodeling of the property is considered an improvement, not a repair.
Improvements increase the value to the property and extend its useful life. Improvements to property must be capitalized. The capitalized costs can generally be depreciated as if the improvements were separate property. Examples of improvements are shown below
Improvments
Additions Bedroom, Bathroom, Deck, Garage, Porch, Patio
Other items: Storm windows, doors, New roof, Central vacuum, Wiring upgrades, Satellite dish, Security system
Heating & Air Conditioning, Heating system,Central air conditioning, Furnace, Duct work
Central humidifier
Filtration system
Plumbing – Septic system, Water heater, Soft water system Filtration system
Lawn & Grounds – Landscaping, Driveway, Walkway, Fence, Retaining wall, Sprinkler system, Swimming pool
