New California rental housing laws 2024: The rules are changing, here's 5 laws that Californian landlords need to know when renting out their home in 2024.

California Rental Laws Are Changing in 2024: What Landlords Need To Know

The office of California’s Governor Newsom had a busy 2023! A raft of new housing bills were recently passed in California that will impact owners of rental properties as the laws begin to come into effect during the 2024 calendar year. 

Landlords, especially those who self-manage a rental home, need to stay across legal changes to avoid being on the wrong side of tenant-landlord laws in their local jurisdiction.

From new rules on security deposits and evictions to tenant screening, here are 5 major changes that Californian landlords need to be aware of in 2024. 

5 changes to California tenancy laws that landlords should know about in 2024

1. Changes to no-fault eviction rules will affect owner move-ins and remodels

The California Tenant Protection Act of 2019 has been amended, altering rules around “no fault” evictions or termination of a residential lease agreement. As of April 2024, more details will be required if a homeowner wants to end a tenancy due to moving-in or undergoing a major remodel of the property. 

If you wish to reoccupy the home as an owner-occupier, you must move in within 90 days of your residents moving out. You must also remain in the home for at least 12 months before the home can go back on the rental market. Same goes for the close family of the homeowner (e.g. spouse, parents, children, grandchildren). Their names and your relationship will need to be disclosed in the termination notice and the same rules will apply. If you or family already occupies a rental unit on the property, or if there is a similar unit available on the property, you may not use this as grounds for termination of a lease. 

For remodels, owners of the rental home must provide more details of the planned work, such as providing the existing residents with copies of permits or signed contracts for the planned works. If the work isn’t carried out, you will legally be required to contact the former tenants and give them the opportunity to move back in. Make sure you get a forwarding address if you plan to remodel your rental home! 

Read More: Understanding the California Eviction Process: A Guide for Homeowners

2. Security deposits are now capped at one month’s rent

As of July 2024, security bonds will be capped at an amount equal to one month’s rent. Previous laws allowed up to three months rent to be collected in bond, on top of the standard first month paid before occupancy. With rents skyrocketing across the states, move-in costs were becoming unaffordable for renters, especially for furnished properties. Going forward, if you charge a monthly rent of $2,500 p/m, the move in cost will be capped at $5,000 inclusive of security deposit and first month rent. This cap applies to both furnished and unfurnished homes. 

What happens if you’re already holding a large security deposit of more than one month’s rent? Don’t stress, there’s no need to return the difference. If you (or your property manager) hold a security deposit or collect one more than one month’s rent prior to July 1, 2024, you may hold on to this amount even if it exceeds the new caps. 

Pro Tip: Take the hassle out of collecting rent and security deposits by letting Belong PRO take care of it (and everything else!). With guaranteed rent and the easy option for residents to pay their security bond in installments, find out why homeowners are ditching outdated property management in Los Angeles, San Diego, San Francisco, Sacramento and more to Belong instead. 

3. Homeowners will be better protected from illegal occupancy

Changes come into effect: January 1, 2024

Trespassing and ‘squatting’ can be a real concern to homeowners with vacant properties. From 2024, a homeowner can alert local law enforcement that their property is uninhabited, allowing law enforcement officials to remove any trespasser who attempts to take up residence or claims to be a legal occupant. Previously a trespass notice was only valid for a period of 30 days. The amendment to SB 602 extends trespass letter validity to a full 12 months and it can be submitted electronically (if your local jurisdiction allows). When a valid letter is on file, homeowners won’t need to go to court to evict anyone living illegally on their property. 

Pro Tip: When it comes to vacant homes, prevention is often better than the cure! Read 10 Proven Ways To Reduce Vacancies & Keep Great Rental Tenants Long-Term

4. New screening laws will prevent credit history discrimination

If you manage your own tenant screening, make sure you update your process for 2024. 

If an applicant is receiving a government rental subsidy, you will need to revise how you consider their credit history and application to rent your home. To avoid discrimination, amendments to SB 267 prohibits landlords from using a person’s credit history unless they are given the option to provide alternative evidence of their ability to pay their portion of the rent. This could be benefit statements, pay records or bank statements. You must also give them a reasonable amount of time to provide this information and reasonably consider it instead of their credit history when deciding whether to offer them a lease agreement. 

Read More: Understanding Fair Housing Laws When Renting Your Home

5. San Francisco introduced an “empty home” tax

From 2024, Bay Area property owners with at least three units that have been vacant for more than six months will be taxed $2,500 - $5,000 per empty unit. Penalties will increase yearly to up to $20,000. Money collected will be invested in subsidizing affordable housing in the city, including for people over the age of 60. 

Individual investors, like those that Belong supports, are less likely to be financially impacted by the measures at this stage, with single-family homes and duplexes exempt. That said, it’s a timely reminder that many counties are actively taking steps to reduce empty homes while the homelessness crisis continues to bite and more families are priced out of home ownership. 

It’s not uncommon for homeowners to sit on a vacant home for a variety of reasons. Some have inherited a family home and aren’t sure if they’re cut out for property management. Others move for work and plan to return to the home and feel unsure about renting the home out. If this is the case, Belong has a solution. We find people that will love and respect your home as much as you do, while also doing all the work to ensure it’s looked after and maintained. Learn more about Belong’s unique residential network and homeowner services here. 

Belong guarantees rent and offers eviction assistance 

Belong PRO homeowners don’t have to worry about constantly changing regulations, as our team of experts do all the work for you and are available 24/7 to answer any questions.  

Belong homeowners earn guaranteed rent, paid to them each month even when residents are late to pay. And, in the unlikely event that residents must be evicted, Belong assists with the process so homeowners are never left stuck in the confusing legal system on their own.

Interested in learning more about Belong PRO services and availability in California? Check out one of our local pages below:

Disclaimer: This article is not intended as legal advice. Your local city is the best place to find information on local ordinances that apply to you and your rental property. In an effort to flip outdated property management on its head, we prefer to use the terms ‘homeowner and resident’ over ‘landlord and tenant’. But as this article discusses legislation, we have stuck to the old monikers. 

Don’t Spend 2024 Worrying About Property Management, Belong Instead!

Is there still a moratorium on evictions in 2024? It varies by city and county. Get a rundown on rent moratorium rules that are having eviction hardship extension or expiring in 2024.

2024 Rent Moratoriums & Extensions: Eviction Laws Landlords Should Be Aware Of

COVID-19 caused financial hardship for a lot of Americans. This put a huge number of renters at risk of losing their shelter during the public health crisis, so laws were introduced to stop it. Known as rent moratoriums or eviction moratoriums, these measures have prevented landlords from evicting tenants for not paying rent if financial hardship is linked to the public health crisis.  

The federal eviction moratorium ended back in 2021. But many states, counties and cities created eviction hardship extensions at a local level and introduced new protections for renters.

In California especially, there are now many overlapping rules at play. This can make it difficult for landlords to know their rights when a tenant stops paying rent. This article will go over how rent moratoriums work, as well as which cities and counties still have measures in place across California, Washington state and Florida. 

Are there still rent or eviction moratoriums in California?

In 2023, eviction hardship extensions were in place in Alameda County, City of Berkeley, LA County, City of Oakland, and San Francisco. This caused great confusion to many landlords, particularly in areas where county measures expired, while local city ordinances remained in place. One such example is San Leandro. Although Alameda Country orders ended, San Leandro’s Eviction Moratorium was initially extended until February 28, 2024. This would have made it one of the longest in the country, but a call was made to end it six-months early, expiring in July 2023. 

Rent Increase Moratoriums in place in California in 2024

A Rent Increase Moratorium remains in place until July 1, 2024. Under Oakland's Rent Increase Moratorium, annual rent increases are capped at the CPI or 3% (whichever is lower), with no pass-throughs (petition approved rent increases, such as for capital improvements) or banking. After June 30, 2024, homeowners will be able to collect on any approved increase as well as banked increases (within the Ordinance and state law restrictions).

For evictions based on nonpayment of rent accrued during March 2020 - July 2023, tenants can’t be evicted if the unpaid rent was due to documented hardship caused by the COVID-19 pandemic. You also can't evict someone for owing less than one month of HUD fair market rent. 


For any lease violations, landlords must show that the breach is based on a reasonable term that the tenant accepted in writing. 

Annual rent increases for rental units subject to the City of Los Angeles Rent Stabilization Ordinance (RSO) are prohibited before January 31, 2024. Between February 1 - June 30, 2024, a 4% rent increase has been approved. An additional 1% for gas and 1% for electric service can be added if the landlord provides the service to the tenant. State law requires landlords to provide an advance 30-day written notice for rent increases of less than 10%. 

For tenants who rent a Single Family Dwelling, they may be eligible for relocation assistance if they receive a rent increase of more than 10% within 12 months and are unable to afford the new amount. Details and amounts are outlined here. 

Laws in California are changing: From new rules on security deposits and evictions to tenant screening, find out 5 major changes that Californian landlords need to be aware of in 2024. 

Is there still a moratorium on evictions in Washington state?

The state of Washington no longer has a state-wide eviction moratorium for COVID relief, however Seattle has additional protections in place for renters. This includes limitations on evictions of teachers, school employees and families with children during the school year (September - June). Check the Renting in Seattle site for further information.

Is there still a moratorium on evictions in Florida?

No, there is no local moratorium on evictions in place in Florida. You can stay up to date on housing legislation, programs and rent limits at Florida Housing Finance Corporation.

Can you evict a tenant after the eviction moratorium expires?

Eviction moratoriums only created a pause on evictions for certain causes such as financial hardship. If you have a resident who is still in arrears once the ban has ended, you are within legal rights to evict them. Other valid reasons also still apply, such as violations of lease terms and conducting criminal activity on your property. 

In this instance, you will need to gain legal advice or speak to your property manager to find out what your costs and protections are. Many property management companies offer “eviction protection”, yet if you read the fine print, they often amount to coverage of around $500 in legal fees. Many property managers also charge fees for oversight of any legal proceedings such as documentation, filing and court appearances.

If you place your home on Belong instead of a property management company, you can rest easy knowing that we will place a top-quality resident that we trust to care for your home. In the worst case scenario, if a resident that Belong placed did stop paying their rent or violated their lease agreement, we will support homeowners by covering legal costs up to $15,000. This doesn’t apply to tenants placed by you or a property management company unless we have also qualified the tenants.

How landlords can protect cash-flow with guaranteed rent

The pandemic didn’t just affect renters. Not all landlords are wealthy investors or corporations, with many individual homeowners facing their own financial hardships when rent goes unpaid. 

To protect from the unknown or periods of nonpayment, landlords need to secure their cash flow. Belong has two unique solutions to help homeowners stay cash-flow positive:

Belong homeowners automatically receive guaranteed rent, ensuring all income is received on time — even if residents fall behind. Learn more about guaranteed rent here. 

If household costs from your rental sneak up on you, Belong can take the pressure off finding extra cash in your budget. From maintenance to insurance costs, Belong’s Split It financing option lets you spread the cost over the term of your lease agreement. You still get paid guaranteed rent, minus the cost of the repayment, keeping you on track. Learn more about Belong’s flexible payment solutions here. 

Instead of worrying about changing regulations and nonpayment of rent, let Belong take care of everything. Belong PRO homeowners, earn guaranteed rent, with rent paid every month, even when residents fall behind. And in the unlikely case that a resident that we’ve chosen needs to be evicted, we’ll even offer $15,000 in eviction protection costs.

Disclaimer: We don’t enjoy using words like ‘landlord’ and ‘tenants’. We refer to members in our network as homeowners and residents, since we’re on a mission to upend and redefine the traditional landlord-tenant relationship. That said, this article requires the use of these terms for clarity on legislation and eviction protections, so they will be used interchangeably.  This article provides a guide for homeowners, but should not replace legal advice. Every eviction case is unique, so a lawyer can help remedy your exact situation

Secure Guaranteed Rent, No Matter What

10 ways to pay for a home renovation and the pros and cons for each

How to Finance Home Renovations and Improvements

When deciding how to finance home renovations — is it better to pay in cash or look at finance? Before you choose, it’s worth considering whether the renovations will increase the value of your property. Whether it’s the resale value or to get a higher rental income price, doing your homework in the local neighborhood and speaking to real estate professionals and contractors (such as Belong), can help to determine your projected return on investment. 

Once you’ve crunched those numbers, you can use them to determine the best way to fund the renovation. For example, if house prices are rising in your neighborhood, you may have received a nice boost in your home equity, which can be used as a source of funds to finance an improvement before selling the home. 

If you own a rental property, it might make sense to use your rental income to help finance your repayments on upgrades that will help increase the value of your home long-term. 

If your home has a livability issue that needs repairing, it could be a good idea to look at finance options that you can access immediately, so that small problems don’t turn into bigger, more costly ones. 

Once you’ve considered your budget and return on investment, here are 9 finance options that can cover the costs of a home renovation. 

9 ways to finance home renovations — and their pros and cons

Using cash makes sense for smaller projects or renovations that sit well below your cash reserves. If you have just enough to cover the budget, this option carries higher risk as you may run out of money to fund unexpected expenses or leave yourself with no safety net for other emergencies unrelated to your renovation.

Here are is a quick comparison of the pros and cons of paying for a home renovation project in cash: 

The least expensive option, with no interest charged

No applications, fees, or repayment terms to manage

Easy to determine a budget within your means

Depending on your savings, it might not be feasible for large projects

You need to have enough cash reserves to fund contingencies and unexpected budget blow-outs

It ties up a large amount of cash that you may need to access in an emergency

2. Borrowing money from friends or family

The “Bank of Mom and Dad” can always be a tempting option for homeowners with parents who have the capital or cash to lend. As this would involve paying in cash, it’s another ‘cheap’ option in terms of not paying interest —but borrowing money from loved ones can be costly in other ways! 

Here are is a quick comparison of the pros and cons of paying for a home renovation project by borrowing cash: 

Like cash, there is no interest or application fees involved

Your family may want to help you build capital once they have paid off their own home

Borrowing money could place a strain on your relationship if you can’t make regular payments or take too long to pay off the loan

It ties up a large amount of cash that doesn’t belong to you, which may leave the lender in a tough spot in an emergency

If you have owned your home for a while, you will have built up equity in the property that you can borrow against. This could be accessed as either a Home Equity Line of Credit (HELOCs), or taking out a Home Equity Loan. Typically you will need to have paid off at least 15-20% of your home to qualify. This option makes sense if you have built considerable equity in your home and aren’t sure of what the renovation costs are going to be — or want to keep your savings on hand. 

Here are is a quick comparison of the pros and cons of paying for a home renovation project by using the equity in your home: 

For HELOCs there is no need to apply for a separate loan, you can redraw the funds as needed and tap into as little or as much as you need

You may be eligible to claim a tax deduction, particularly if you are funding necessary repairs on a rental home — or making capital improvements than can be depreciated

Interest rates are lower than a personal loan or credit card

A Home Equity Loan will require an application and can have a higher interest rate than HELOC

Interest rates are variable and could impact your budget as they rise

Adds time on your mortgage to draw down in the equity in your home

The amount will affect the debt-to-income ratio on your credit rating, even if you don’t spend the whole amount

Your home needs to be collateral and repayments will be due on top of your mortgage

A cash-out refinance allows you to refinance your mortgage for a higher amount and use the extra cash to finance your home renovation and remodel projects. If you've locked in a record-low rate this might not be the best option. But if you have a variable loan or a less-than-favorable rate, it could work for your financial situation. 

Here are is a quick comparison of the pros and cons of paying for a home renovation project with cash-out refinance: 

It could be a good time to refinance your mortgage and negotiate a better deal on your repayments

As it makes up part of your mortgage, you only have the one repayment amount to make

You could be resetting the clock on your mortgage time, so think long-term and make sure you’re not still going to be making repayments well into retirement

You need to reapply for a mortgage, which can be complicated and time consuming, especially if your circumstances have changed recently

You will be making interest payments on the amount for the full life of your mortgage, which is considerably longer than standard financing 

When it comes to home renovations is it better to pay in cash or look at finance? Here are 10 ways to pay for a home renovation and the pros and cons for each.

Short-term rental vs long-term rental - which is a better investment? Compare the differences to decide if owning a short-term rental is the right fit for you.

Is Owning a Short-Term Rental Property Really More Lucrative? How To Decide

Are short-term rental properties a good investment? It depends on a lot of factors, so before deciding if owning a short-term rental is right for your situation, you need to consider the real cost — including time, effort and money. You should also compare and consider whether you may be better off with a long-term rental that offers stable income, tax benefits, and less wear-and-tear on your home.  

With a higher per-night rate short-term rental properties can be a profitable investment, but finances are likely to vary significantly. Especially in this macro environment, where scores of short-term property owners are reporting increased vacancy rates. Additionally, the payday that can come from a popular vacation rental becomes a lot less attractive when you factor in the number of hours you’ll spend working as a frontline customer service agent for your own property. 

Owning a short-term rental might be best for you if you intend to use the property for part of the year, or if you’re looking for a higher risk and reward opportunity. In the right location, short-term rentals can be very lucrative, but becoming a ‘host’ rather than a ‘landlord’ comes with considerable challenges — including the ethical implications of removing housing options from those who are currently priced out of homeownership. 

A Bloomberg report revealed that AirBnb spends millions of dollars annually to make “nightmares” go away for guests and hosts alike. Meanwhile, local governments are fighting back against short-term rentals, which reduce the amount of available housing for full-time residents and raise rent and home prices for everyone. 

Owning a long-term rental might be better for you if you want to earn passive income, take advantage of tax strategies, and prefer a long-term investment vehicle that requires less of your time and energy. If you don’t plan to sell a property immediately, long-term rentals can offer a good return on your investment.

To help weigh up your options, in this article we dive a bit deeper into short-term rentals and what’s really involved in using your home for this purpose. 

What is a short-term rental property investment? 

A short-term rental is a residential home or investment property you rent daily, weekly, or monthly. Also known as a vacation rental, short-term rentals are typically listed on shared economy sites like VRBO, HomeAway, and Airbnb. This is a great option for people who live in their home while renting out a room, or for people who use their home for part of the year — renting the entire house for vacationers when they’re away. 

This differs from a long-term rental property, which is rented to a single person/couple/family for a fixed-term on a lease agreement. This is ideal for investment properties, with homeowners benefiting from the stability of having the same residents for 12-months or more. A long-term rental is also significantly less work than managing a short-term rental — helping to achieve truly passive income if managed well. 

Is it legal to use an investment property for short-term vacation rental?

Before deciding what to do with your investment property, it’s important to note that some cities either restrict or ban short-term rentals for investment homes. Residential homes that are shared are great for vacation rentals, but every investment home used for this purpose makes one less home available to local residents looking for somewhere to live. Many states and counties are intervening and introducing short-term rental ordinances and licensing fees to restrict the number of investment homes used as short-term rentals. You will need to apply for and pay for a permit to operate a short-term rental property in most states in the US. 

In California, for example, there is a new Short-Term Rental Ordinance (STRO) in San Diego that caps the total number of short-term rental properties to 1% of the city’s total housing. In Los Angeles, it’s illegal to put an investment property on the short-term market, with licenses only granted to homeowners who live in the property for at least six months of the year. 

Are short-term rental properties a good investment? 

Whether a short-term rental property is a good investment will depend largely on your financial situation, your ability to invest the time and money into managing the high turnover of guests in the property, and the location of the home. There’s also the ethical consideration of removing a home from the rental market when homeownership is out of reach for a growing cohort of Americans. 

As with any real estate investment, carefully calculate your expenses and potential cash flow. You will also need to evaluate each property to determine if it is suitable for a short-term rental. 

There are unique costs associated with short-term rental investments. Outside of the initial investment of acquiring the home, ongoing short-term rental expenses include:

Listing, marketing, and administrative costs 

Cleaning and preparing the home for every guest

Laundering all bed linen and towels for every guest

More regular maintenance to the property and furnishings

Landscape maintenance if you have a yard or garden beds

Utilities such as electricity, gas and water

Transient Occupancy Taxes and state licensing fees where applicable

Regular supplies and stock of essential items like toilet paper, soaps, shampoos and basic kitchen ingredients

There’s also the time and energy cost. As a host, you will be responsible for customer service associated with your short-term rental. Customer service responsibilities will require you to communicate with potential and current guests promptly and professionally. You will also need to respond to questions or emergencies whenever they arise. You should expect much of this communication to occur in the evenings and on weekends. 

Managing a short-term rental investment property often includes additional responsibilities, some of which you must complete more frequently.  Administrative tasks will include, but are not limited to:

Maintain and update the short-term rental listings on sites like VRBO, HomeAway, and Airbnb

Market the property, arrange for photography, request guest reviews  



Manage bookings and update availability across platforms 



Record keeping tasks which will include finances, bills, taxes, payroll, or vendor management 

Arrange for cleaning and maintenance between every guest

If you can identify and hire the right professionals, you may delegate some of these tasks to others. Engaging a team of professionals will allow you to focus more of your time on managing those partners and solving problems as they arise. It might be worth checking out what other Airbnb hosts are saying about their experience before opening your home as a vacation rental. 

How owning a short-term rental differs from owning a long-term rental property 

Owning a short-term vacation rental can differ significantly from investing in long-term real estate properties for lease on the rental market. Carefully compare the two to decide which type of real estate investment property is best for you. 

With work and dedication, short-term rental investments can be very lucrative. Many short-term rental owners report significant earnings, even if their property is not leased for the entire year. Achieving success requires careful planning and calculations because your property will not have long-term tenants — and your ongoing costs and maintenance will be higher. The cash flow and incomes from a short-term rental property are highly variable, making it more difficult to budget and plan expenses. 

In contrast, long-term rental properties have fewer operating costs and long-term tenants. While a long-term rental may not be able to command the same nightly rate as a short-term rental, finances will be more stable and easier to predict. If your home is with Belong, you can even receive guaranteed rent and manage your cash-flow with financing options for any expenses including maintenance. 

Tax implications and strategies for real estate investments 

Are short-term rental properties a good investment? Short-term rental vs long-term rental, compare the differences to decide the right fit for you.

Is Owning a Short-Term Rental Property Really More Lucrative?

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If you're looking to know what your rental income tax rate will be for 2024, learn more about federal tax rates on rental income in the US for rental property owners.

2024 Federal Tax Brackets on Rental Income: A Guide for Rental Home Owners

In 2024, federal income tax brackets changed to account for high rates of inflation. While we can’t provide personalized advice for your exact tax situation, if you own one or more rental properties, this guide will help you better understand the 2024 rental income tax rate and how it could impact you in upcoming tax seasons. 

How do rental income tax rates work for rental properties? 

Homeowners who list their home on the rental market will have federal tax responsibilities. Landlords need to report all rental income on their personal tax returns, along with documented expenses that can be deducted from this reportable income. 

Rental income is taxed as ordinary income, with a landlord paying tax based on their marginal tax bracket. This is why it’s important to note the 2024 changes in tax brackets, as your rental income will affect the rate in which your income is taxed at. 

The United States has a progressive tax system which means your tax rate increases as your income grows. Tax rates in the United States range from 10% to 37%. Importantly, each person is charged at multiple rates as your income rises, rather than just at the rate of the bracket into which you fall for the total amount of your income. You can also lower your tax burden or the amount of money you will owe at the end of the year by claiming certain deductions on your tax return. Rental properties attract a number of strategies that can help lower your tax liability, so good record keeping is essential. 

In 2024, the income limits for all tax brackets will be adjusted to accommodate inflation. The Tax Foundation lists several federal income tax rates for 2024:

2024 Income Tax Rates for Married Individuals Filing Joint Returns:

2024 Income Tax Rates for Heads of Households:

Read more about tax brackets and rates for 2024 in this handy guide by the non-profit Tax Foundation or see the IRS guide to Tips on Rental Real Estate Income, Deductions and Recordkeeping.

How you are taxed, along with any deductions and benefits you’re entitled to, varies depending on how your property is treated on the rental market and how much time you spend in the home:

Personal residence: If your home is rented for 14 days or less in a year, the property is considered your personal residence and you won’t be required to declare any income. This means you can deduct mortgage interest and property taxes, but not any expenses relating to the property as a rental.

Rental property: If you use your home for less than 14 days and the home is rented for 15 days or more, such as a long-term lease or popular vacation rental, it’s considered a rental property. You will need to report any rental income and deduct expenses based on the percentage of days that the home was rented out. 

The 10% rule: If your property was used personally as a residence for more than 14 days or 10% of the total days in which the home was rented, your home is considered a personal residence and you cannot deduct any rental losses. Some tax deductions still apply, but to a limited extent. This rule generally applies to homes that are used as short-term rentals for only part of the year. 

There are both federal and state taxes related to your real estate rental income, but at the federal level, your net rental income is taxed as ordinary income according to your IRS tax bracket. Essentially, the rental income you collect, minus your expenses, will contribute to your total income, which is progressively taxed. 

To calculate your federal income tax from rental incomes, you (or your accountant) will need to use two IRS forms: 

Schedule E: Supplemental Income and Loss, Form 1040 or 1040-SR

To determine your rental property income (and rental income tax rate), you’ll need to subtract any rental property expenses from the total income generated from your rental property. This number becomes your total taxable income before depreciation. Once you calculate and deduct depreciation from that number, you will add the remaining amount to any other taxable income. 

To complete your taxes accurately, it’s advisable to get help from an accountant. If your rental property is eligible for deductions on your tax return, any costs associated with professional advice such as legal assistance or accounting can be claimed as an expense. 

Rental property income is primarily the rent you collect from your residents. However, there are several other potential sources of income that you will need to include. If your residents have pre-paid some or all of their future rent, you’ll need to include this as part of your rental property income. Security deposits that were not returned to a resident should also be included. If you are still in possession of a security deposit and the lease has not expired, you should categorize those amounts as a short-term liability on your balance sheet, so they are not included in your income. 

Any additional fees, such as pet or lease cancellation fees, will also contribute to your total rental property income. Finally, you’ll need to include tenant-paid owner expenses in calculating your rental property income. These types of expenses can occur if your resident is not obligated to pay for utilities, like water or electricity, as part of their lease but they make a payment and are not reimbursed. 

Rental property tax deductions come in the form of expenses related to the operation and management of your property. These deductions work by lowering the overall taxable income at the end of the year.

Common rental property tax deductions include:

Utilities, pest control, and other services

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Is Buying Rental Property Worth It in 2024? Uncover the benefits and challenges of real estate to decide if it’s the right type of investment for you.

Is a Rental Property a Good Investment in 2024? Everything To Know

The last few years have been quite a ride for the real estate investment market and 2023 was no exception. First there was the historically-low interest rates, skyrocketing rents and massive appreciation gains. Then homeowners were greeted with rising interest rates, high inflation and constant speculation of a recession.

If your head is spinning, you’re not alone. But bottom line: is rental property still a good investment in 2024?

To find out the potential risks and rewards of the rental market in 2024, Belong compiled research and analysis on the current rental property market from a variety of sources and Belong's own internal insights. This took place between June and November 2023 and is subject to change.

Discover Belong PRO: Take the guesswork out of your cash flow with guaranteed rent, 24/7 support and more by joining the Belong network. 

What are the potential rewards in the real estate market in 2024?

The U.S. doesn't have one 'housing market', but rather many housing markets within every locality. A good buy in Seattle isn't the same as a good buy in Salt Lake City. Some cities have consistent demand, others will go through fluctuations based on supply and demand.

So is buying a new investment property a good idea in 2024? The answer will always depend on your personal situation and the properties you're considering. That said, here is a list of 6 potential rewards or 'pros' of investing in the real estate market in 2024. 

1. Rental homes can hedge against inflation

When inflation rises, so do rents. Real estate investments are often described as a "hedge against inflation." This is because with a fixed-rate mortgage, interest payments will stay the same but your rental income can increase over time. You'll also be building equity in the home and can benefit from inflation and appreciation long-term. 

2. Property values have a history of increasing after economic downturns

Housing appreciation has skyrocketed in recent years, with double-digit gains on the value of most homes. Of course, there's always the risk of an economic downturn that could change that quickly. Thankfully, property values have a history of bouncing back and increasing after economic downturns. That means if you're investing for the long term, you can expect the value of your property to rise over time — even if there's a risk of values declining in the short term. 

3. Single-family homes are less volatile than the stock market

According to data from Roofstock, average annual returns on single-family homes in the rental market are comparable to stock market returns and outperform bond returns, but with considerably less volatility. They also report that there's no correlation between single-family homes and the stock market as an investment, meaning that real estate can be a good way to diversify a portfolio. 

Like the stock market, real estate investing requires careful planning and knowledge to maximize returns. Many first-time investors face a learning curve, but there’s an opportunity to learn what works for your personal finance goals and build on it. Our Belong PRO team specialize in working with first-time rental owners, so if you’re just starting out or have inherited a home, we can simplify your journey and financial success.  

Learn More: What Should I Know Before Renting Out My House For The First Time?

4. Low affordability is fuelling rental demand

Even as house prices slow across many markets, they're far from affordable for many Americans. CNBC reported that even with pricing slumps in some markets across 2023, a number of research firms predict that home prices will keep rising in 2024. This is simply because there aren’t enough homes to meet demand. 

People will always need a place to live and as fewer Americans are able to buy their own homes, good rental investments in the right neighborhoods can continue to attract long-term residents with low vacancy rates. 

Learn More: Belong Expands to New Markets, Giving More Americans a Place to Belong

5. Rental expenses come with tax write-offs and benefits 

Tax write-offs are a major perk of owning a rental property. The IRS outlines rental expenses you may be able to deduct on your tax return including mortgage interest, property tax, and operating expenses including property management fees, depreciation, and repairs. You can even deduct the cost of hiring an accountant or tax professional to maximize your claim. 

Learn More: The Ultimate Tax Prep Guide for Landlords

6. Technology is making it easier than ever to manage a rental property

For the longest time, there’s only ever been two options for managing a rental property: do it yourself (which is a lot of hard work), or hire a property manager (which can come with its own challenges). 

But after lagging behind, technology is finally finding its place to revolutionize how rental homes are managed. Because the real opportunity that modern tech presents is the chance to completely rewrite the rental experience. 

Belong does exactly that, combining industry-busting technology with human smarts to make renting lovable for both homeowners and their residents. From guaranteed rent and 24/7 customer service to innovative financial solutions, we’re flipping old school property management on its head. Learn more here. 

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Is a rental property a good investment in 2024? Uncover the benefits and challenges of real estate to decide if it’s the right type of investment for you.

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