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See how owners of rental properties can use Qualified Business Income (QBI) Deductions to reduce their tax bill thanks to what’s called a 199A deduction.

What Are Qualified Business Income Deductions For Landlords?

Also known as the section 199A deduction, the Qualified Business Income (QBI) Deduction lets landlords potentially deduct up to 20% of their qualified business income (QBI). Let’s look at this in more detail.

Can I get the QBI deduction on rental income?

The good news is that any non-corporate landlord should qualify for the deduction.

Rentals that are classified as trades or businesses under IRC § 162 are not considered passive. If the management of the rental property rises to the level of a trade or business as defined by § 162, then it qualifies for the deduction. 

Rental properties are typically treated as passive activities—these are excluded from the definition of a qualified trade or business. But it’s important to understand the following:

You might qualify for the QBI if you’re organized as an S-Corporation or a pass-through LLC, estate, or trust (If you’re a C-Corp, you’re out of luck.).

Rental income declared on a Schedule E or K-1 also qualifies.

If you pass hurdle #1, you might qualify if you meet a number of conditions.

If you spent more than 50% of your time during a tax year in your real estate business – and that represented more than 750 hours in the same year, you passed the next hurdle. Congratulations!

The QBI is a deduction that you take on top of the standard deduction if don’t itemize, or the itemized deduction if you do.

But you’re not there yet. Your QBI is subject to limitations based on your taxable income that include the following:

The amount of W-2 wages paid by the qualified trade or business; and

The unadjusted basis immediately after acquisition (UBIA) of qualified property held by the business, which is the basis of the qualified property on the placed-in-service date.


Note that only items included in a landlord’s taxable income can be counted toward the QBI deduction. Some of the most common income sources include rent, non-refundable and forfeited deposits, late payment fees, pet fees, and federal rent subsidies (HUD). This also generally includes, but isn’t limited to the deductible part of self-employment tax, self-employed health insurance, and deductions for contributions to qualified retirement plans.

The safe harbor rule comes into play when a landlord owns a handful of rentals but doesn’t qualify as a real estate professional. In this situation, he or she can still qualify for the QBI deduction, provide the rental activities constitute a trade or business.

The IRS published a notice in 2019 that provides a safe harbor for landlords to qualify for the IRC Section 199A deduction. In order to qualify the three requirements that must be satisfied:

Keep separate books and records to show income and expenses for each rental real estate enterprise;

Perform at least 250 rental services (Or other services, such as those provided by tradesmen and property managers) per year. Activities that satisfy the 250-hour requirement include landlord-related. The IRS says that rental services also include:

(i)         	Advertising to rent or lease the real estate;

(ii)       	Negotiating and executing leases;

(iii)     	Verifying information contained in prospective tenant applications;

(v)       	Daily operation, maintenance, and repair of the property;

(vi)      	Management of the real estate;

(vii)    	The purchase of materials; and

(viii)  	Supervision of employees and independent contractors.

3. Keep contemporaneous records of time reports, logs, or similar documents, such as hours of services performed; dates and descriptions of services performed; names of those performing such services.

Note that the safe harbor doesn’t apply to triple-net leases because the tenant is responsible for costs that would otherwise be the responsibility of the owner. As such, the IRS says that the rental income from a triple-net lease doesn’t qualify as trade or business income. It’s merely investment income.

If a landlord doesn’t qualify for the safe harbor, 20% of his or her rental income may still qualify as trade or business income, if they must meet some additional requirements

In 2021, real estate investors earning over $329,800 (if married and filing jointly) or $164,900 if filing as a single individual can claim the deduction as a percentage of wages paid with respect to the trade or business, or the combination of a percentage of wages paid, plus a percentage of the unadjusted basis of the property. These limitation thresholds are adjusted annually for inflation.

Landlords who own multiple rental properties should note that there are additional planning strategies that can maximize the IRC Section 199A deduction.

The Section 199A deduction is scheduled to automatically expire in at the end of 2025. In order to claim the current section 199A deduction, taxpayers who own real estate must be able to show that they’re operating a real estate business as a trade or business and not simply holding real estate for investment.

Keep in mind that, as helpful as this piece might be, we strongly advise that you speak to your accountant to get a firmer grasp on the implications and ramifications of the laws being discussed here. They will have a much firmer understanding of your individual circumstances and can clarify any questions this post might have raised.

Property management was unsatisfactory for both homeowners and renters - until two entrepreneurs decided it was time to disrupt the old model with Belong.

How Two Entrepreneurs Are Elevating Property Management

Property management was unsatisfactory for both homeowners and renters - until two entrepreneurs decided it was time to disrupt the old model with Belong. Read on for the story of how Belong started and their mission. 

In the case of Belong, our founders – Ale Resnik and O. Savir – were inspired by their experiences with the very act of “Belonging.”

They captured it poignantly and personally in a blog, writing:

We are a company started by immigrants. As immigrants, we had to redefine, multiple times and in numerous ways, what Home meant to us.

Is Home the walls around you and the ceiling above you?

As they began thinking deeply about what home meant – along with another founder, Tyler Infelise – these imaginative serial entrepreneurs had an important revelation about its fundamental essence.

They put it eloquently in that same blog post:

“With time, we discovered that Home isn't a place. Home is a feeling. Home is where our heart is.”

As they looked for their next entrepreneurial venture – conducting a lot of research and spending a lot of time talking to friends and family – an opportunity began to take shape.  An opportunity that involved a total, bottom-up reinvention of something known as “property management.”

Ale and O decided to take on this challenge because they saw that the need was great.  As they wrote, “We chose an industry that hadn't changed in centuries and offered no elements of delight to those it was meant to serve.”

The founders recognized that tenants often feel like temporary guests living in somebody else’s home.  Some are treated badly (we’ve all heard our share of landlord horror stories), and often are treated like second-class citizens.  So the company’s mission – concisely put – is to make tenants feel like they belong. 

Central to the vision that these two founders had was to create a company where people who loved their houses  – Belong calls them “homeowners” –  could be connected to people who would love them as much as they do.

If you’re a homeowner – whether you are downsizing, or are dealing with a long-term family home – Ale and O have built a system and culture where you will be incredibly well looked after.

Read about Belong’s unequaled suite of services here.

Belong will find the perfect residents, screen them, and help them move in – and you move out – with precision and care.  They use technology to streamline, and committed Concierges (people, not bots) to make sure everything runs perfectly. 

Once someone moves in, their full-time team of Belong Pros handles all maintenance – expected and unexpected – which is a remarkable service in a world where reliable and talented contractors are in great demand.  It feels great when work is done right the first time around.

Another benefit of Ale and O’s vision is that happy residents – which they enable – will stay longer and reduce vacancies, which are expensive!

If you’re a homeowner, Belong’s founders have built something that can, candidly, rock your world.  Ale, O, and Tyler wrap it up like this:

“We love building products that make people happy. More specifically, we love surprising people with something they never thought could make them happy.”

Disruption is here. Get ready to be delighted.

Houseplants are a great way to brighten up any home and a budget-friendly way to add value and warmth to a rental property. Here are 5 of our favorites.

5 Plants That Will Brighten Your Rental Investment Instantly

Houseplants are a great way to brighten up any home without a massive investment, making them a budget-friendly way to add value and warmth to a rental property. Here are 5 of our favorite house plants for adding life to rental homes. 

Think of the trends we’ve seen emerge on Instagram and elsewhere over the course of the past year and a half: puppies, sourdough, and houseplants. It is no coincidence that all these trends revolve around living, breathing things — yes, even sourdough, with its bacteria and yeast giving rise to each and every X-scored loaf. In fact it makes perfect sense: inundated with such dark news it’s no surprise that, subconsciously or not, people began to surround themselves with things that grow, change, and give us hope for the future. Because when we see things growing we feel more alive. 

That’s why Belong encourages everyone in their community, homeowners and residents alike, to cultivate some plant life in their homes. We all know what a charge of life we feel when we walk into a space filled with plants. What’s more, if a plant looks healthy and cared for, it feels safe to assume that the house it lives in is treated just as well, if not better.

We’ve written before about how to build a beautiful backyard, but to help you spruce up the inside of your home, here’s our list of 5 great houseplants.

We love the look of palms in general — the fronds spreading like the fingers of a hand, so thin and delicate and beautiful they seem to be waving at you, calling for your attention.  But most palms require a lot of care and a lot of sunlight. The Lady Palm is the exquisite exception; though it doesn’t lack for palminess, it also doesn’t need much sunlight, making it a perfect indoor plant.

There’s something about the spongy leaves of a jade plant that we find wonderfully sumptuous. They’re as pleasing to look at as they are to touch, too: the beautiful contrast between the thick, heavy branches and the beautiful contoured leaves is a visual.  They’re also very easy to care for: because they’re succulents they can sometimes go months without being watered!

What’s more, the jade plant is also called the lucky plant or money plant, which makes it a wonderful present for a homeowner to leave for a new resident.

Like the idea of a succulent, but looking for something a little more visual drama than a jade provides?  A snake plant might be right for you.  Its leaves are long and flat and far more striking than the jade’s. But much like succulent cousin, it only needs to be watered occasionally (in fact, in the winter, it can go up to 2 months without any H2O).  And it doesn’t need a lot of light to thrive, making it ideal for apartments and rooms that don’t get much sun!  Also, a NASA study shows that it actually cleans the air. 

A flowering plant, the clusters of pretty, pink blossoms add a pop of color and a lovely scent to any room.  They only need indirect sunlight and are drought resistant, too, which makes them the ideal plant for novice plant owners. 

A hanging plant with long cascades of delicate vines, the String of Hearts adds a touch of drama to any room.  It retains water well, too, so it doesn’t require helicopter plant parenting, and its pink stems and waxy leaves make it more colorful than your typical houseplant.

There are lots of ways to create a home that someone will love, but there’s nothing that creates as much impact with as little cost or effort as houseplants! If you're looking for bigger changes, check out the top design trends for 2022. 

Make your home stand out and capture more rent – quickly and affordably – in our fitness-obsessed culture

Home Fitness Ideas Under $300 To Add Muscle To Your Rental Listing

Make your home stand out and capture more rent – quickly and affordably – in our fitness-obsessed culture.

Few amenities are more attractive to potential renters than a gym. Given the health and wellness trends sweeping the country – and the reluctance many still have to exposing themselves to heavy-breathers at a gym – you can easily see how home fitness equipment can differentiate a property and give you the ability to charge more for it. Of course, some investments – like a $2,800 vertical climber – are simply not worth it.  

But there are many price-effective opportunities to add a fitness component to your home.  

The first question you may be asking, though, is where to put all this stuff? After all, most homes are not big enough to convert an entire room into a state-of-the-art fitness facility. Thankfully, there are some practical solutions that will surprise you with their ease and creativity.

You don't need to remodel your rental to add a gym or home fitness space. This link to more than 30 inspired solutions from HGTV will spark your imagination. They range from the back of a door to a garage cubby to an attic or basement. Depending on the climate you live in, an outdoor gym can also be a great solution.

Once you figure out where you are going to locate the gym, the next step is to decide how to want to outfit it. For the smallest spaces, you might want to consider suspension training systems, which consist of a series of ropes and belts that are suspended from a single point. That can be a doorway, the wall above a window, or even a tree. They are affordable – many are under $75 and $150 will get you a premium model – and some come with an app, which you can offer to your tenants as well. Here’s a link to the seven best, according to Healthline.

Affordable home fitness equipment for rentals with small spaces

If you have a small area within a larger room that you can screen off, it can be outfitted with a collection of workout equipment that will deliver a lot of bang for the buck. (Here are some tips we found on Pinterest for separating a gym from the rest of the room.)  This new “gym niche”   can include kettlebells; a balance trainer; slides or wheels that provide core stability and won’t mess up your floors; and this sweet Core Max Ab Machine, which, ringing in at an affordable $109, is the most expensive of the lot (and that includes the “power assist rebound system”).

Affordable home gyms to fit into rental homes

If you have the space to spare you might be surprised at how affordable some larger workout equipment can be. This space-saving, quiet-running treadmill is just $260. Needless to say, you can spend more, but people aren’t expecting Equinox-level equipment in a rental place. This folding exercise bike is just $129. There are also folding treadmills available – here’s a solid-looking one for $380 – so if you want to give your tenants the ability to turn their gym back into the living room, that flexibility is easily achievable.

We were also drawn to this compact rowing machine for $300, as well as this Weider Home Gym system – complete with a high and low pulley stations, a 4-foam padded leg developer, and an 80-pound weight stack that, when used with pulleys, can offer more than 200 pounds of total resistance.  (Forgive us for sounding like a commercial, but that value carries a lot of weight with us.)  Indeed, there is a lot of innovative workout equipment available – for example, for just $119 you can get a “Fusion Motion” portable gym tricked out with 8 accessories that include heavy resistance bands, an ab roller wheel, and more – enough for a full-body workout. 

If you think you’re going to have tenants who need to take out their frustration somewhere, try this free-standing punching bag for just $209. If, on the other hand, you want to satisfy someone whose idea of fitness is to jump on a vibrating exercise machine, this nifty LifePro Vibration Plate Exercise Machine, which delivers a whole body workout through its vibration fitness platform – we’re in! – is just $198. And, if you want to make your gym feel even more special, you can add this cute little retro-styled Frigidaire for just $195. The side bottle opener is a very cool touch, must say.

Of course, these home enhancements are not going to replicate what a gym can offer, but they are likely to be an unexpected surprise that makes a home special and easier to fall in love with – while saying something meaningful about you at the same time.

Add serious muscle to your rental returns with Belong

Like leotards and legwarmers, property management is so 80's. If you really want to strengthen your rental investment, consider ditching the suits and joining the industry disrupter, Belong. We'll take care of everything to get you the best possible return and residents for your home. Learn more at belonghome.com. 

Make your rental listing stand out and capture more rent in our fitness-obsessed culture with these home gym ideas under $300

Belong

Ashleigh Graf

Jordan Newsom

Harrison Kelly

Melanie Kershaw

Flora Fiorillo

Ashleigh Graf

Jordan Newsom

Harrison Kelly

Melanie Kershaw

Flora Fiorillo