Deductibility
Understanding the difference between OPEX and CAPEX is key for any property manager. Think of OPEX as your everyday “keep the lights on” costs, while CAPEX is for big upgrades that add long-term value.
When it comes to the IRS, roof repair costs are generally tax deductible as a business expense for rental properties because they fall under maintenance. However, if you replace the whole roof, it might be seen as an improvement that you have to write off over many years.
Because every property and tax situation is a bit different, you should always consult with a CPA to make sure you are filing correctly. They can help you decide if a specific job is a quick fix or a major capital improvement.
Lifecycle Budgeting
Planning for a roof shouldn’t be a surprise that keeps you up at night. You can actually predict when you’ll need to spend money by looking at what the roof is made of and how old it is.
- Check the material type to see how long it should last, as shingles might last 20 years while metal can last 50.
- Track the roof age so you know exactly where you are in that timeline and aren’t caught off guard.
- Build a capital reserve by putting away a little bit of money each month based on the expected replacement date.
This helps you stay ahead of the game and ensures the money is there when the time comes. It is much easier to save a little now than to find a huge chunk of cash later.
Owner Communication
Talking to property owners about roof costs can be a bit scary if you don’t have a plan. The goal is to be clear and honest without causing anyone to panic.
- Present the roof condition using simple photos and a status report that shows what is happening right now.
- Show upcoming costs well in advance so the owner has plenty of time to wrap their head around the numbers.
- List out priorities so they know what needs a fix today and what can wait until next year.
Keeping owners in the loop early makes you look like a pro and builds a lot of trust. When they know the plan, they feel much more comfortable with the expenses.
