If you’re a commercial property owner, you need to be tracking every improvement and repair that occurs on your properties. While that might sound like a lot of extra work, the benefits are well worth it! Here are three reasons why you should be tracking your commercial property improvements and repairs.
Documentation For Taxes
If you own commercial property, you’re always on the lookout for tax benefits for commercial real estate owners. Keeping the invoices for each property repair or improvement is very helpful when it comes to tax season. Claiming the repairs and improvements is not only legally necessary, but it may also provide you with tax deductions. Keep your invoices of each expense and consult with a tax professional to see what deductions you qualify for.
There are a few deductible expenses you can probably identify on your own. Commercial property improvements, repairs, and maintenance items that typically qualify as a tax deduction are:
- Small maintenance repairs. The amount must be under $2,500 per invoice. Some businesses or commercial properties qualify for a $5,000 limit, but this does not apply to everyone.
- Small improvements. Small improvements are generally a combination of maintenance and repairs that cost less than $10,000. However, the profit from your commercial property must be under a specific amount for these to qualify.
- Repeated repairs. Repairs that you have to do regularly to keep your commercial property operating qualify for a tax deduction. These repairs need to be done at least twice during a ten-year period, although not all repairs qualify.
Tracking Repairs Can Reveal Patterns
Maintenance patterns can show you when it’s time to replace or update something. For example, if the maintenance team is constantly getting called to repair HVAC systems in one of your office buildings, it’s possible that the model of the HVAC is the culprit. Then, you can determine whether it’s a good idea to employ a preventative maintenance plan or replace them with a more reliable model. As a result, you’ll save significant time, effort, and money. Over time, tracking property repairs will help you anticipate upcoming expenses and stay one step ahead.
It’s Appealing to Buyers and Investors
Having a record of all the commercial property improvements and repairs you’ve done is a great way to raise the value of your property. If you have a record of the improvements you’ve made over the past few years, you can leverage that information to market the property. For example, a resurfaced parking lot or new energy-efficient windows could set your property apart from the competition when it’s time to sell. Find out what features will appeal to your target market. Then, use that information to decide what improvements to highlight.
How to Track Improvements and Repairs
Many commercial property owners choose to store documents in file cabinets or on a hard drive. Others prefer the flexibility and ease of access that cloud storage provides. In any case, it’s important that you keep everything organized so that you can easily access it at tax time or when you’re looking to sell. Organization and ease of access to property improvement and repair documents is essential.
When you’re tracking every bill and invoice, it adds up to a lot of documents to keep and file. If you often struggle to locate the information you’re looking for, you need a better solution. We designed STRATAFOLIO specifically for commercial real estate owners. It allows you to upload and organize your records all in one easy, accessible and secure location. Also, with STRATAFOLIO, you can give access to the key players in your business so that they can access the information in just one click.
Interested in learning more about what STRATAFOLIO can do to help you track property maintenance and repairs? Get in touch today to schedule a demo and learn everything STRATAFOLIO can do for your business!