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How to Deduct Rental Property Expenses on Your Taxes: Ohio Investor’s Guide

Ohio – December, 2025: Owning rental property in Ohio can be a highly profitable investment strategy. From Cleveland (44114) and Columbus (43215) to Cincinnati (45202) and Dayton (45402), investors are enjoying strong tenant demand, affordable property values, and long-term appreciation. But one of thebiggest financial advantages of real estate investing lies in the tax benefits—particularly, learning how to deduct rental property expenses on your taxes.

This guide provides Ohio investors with a step-by-step breakdown of deductible expenses, financing considerations, and the role of GHC Funding in helping you maximize both cash flow and tax efficiency.

Ohio Investor’s Guide

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Why Rental Property Deductions Matter

Real estate investors in Ohio can significantly reduce taxable income by properly deducting rental property expenses. These deductions lower your overall tax bill and allow you to reinvest savings into scaling your portfolio.

Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!

 

 

By combining these deductions with flexible financing solutions such as DSCR loans, SBA loans, and bridge loans from GHC Funding, investors can optimize both their cash flow and long-term ROI.

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Common Rental Property Tax Deductions

1. Mortgage Interest

The interest portion of your monthly payment is tax-deductible. For example, investors in Cleveland financing a duplex with a DSCR loan can deduct thousands annually.

2. Property Taxes

Ohio rental property owners can deduct state and local property taxes, which vary widely across counties.

3. Operating Expenses

This includes day-to-day costs such as:

• Property management fees
• Repairs and maintenance
• Utilities (if landlord-paid)
• Advertising and marketing for rentals

4. Insurance Premiums

Landlord and liability insurance costs are deductible, making coverage both protective and financially beneficial.

5. Depreciation

Residential properties are depreciated over 27.5 years, while commercial assets depreciate over 39 years. Even as values rise in Ohio’s hot markets, investors can deduct depreciation to lower taxable income.

6. Travel & Mileage

Travel related to managing your properties—such as driving from Columbus to inspect a Dayton rental—can be deducted.

7. Legal & Professional Fees

Attorney fees, accountant services, and property management consulting all qualify.

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Example: Deducting Expenses in Ohio

Suppose you own a fourplex in Cincinnati worth $600,000 with a DSCR loan through GHC Funding.

• Mortgage interest: $18,000
• Property taxes: $8,000
• Repairs: $5,000
• Insurance: $2,500
• Depreciation: $16,364

Total deductions = $49,864, which can dramatically lower your taxable income.

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Current Market Insights for Ohio Investors

Interest Rates (as of October 2025):

• DSCR Loans: 7.25% – 8.75% (no tax returns required; based on rental income)
• SBA 7a Loans: Prime + 2.75% (~11.25%)
• SBA 504 Loans: 6.75% – 7.5% fixed
• Bridge Loans: 9% – 11.5% (ideal for repositioning and refinancing)

Loan Requirements:

• DSCR Ratio: 1.0 – 1.25 minimum
• LTVs: Up to 80%
• Eligible Properties: SFRs, duplexes, triplexes, fourplexes, multifamily, mixed-use
• Entities Accepted: LLCs, corporations, partnerships

By choosing GHC Funding, Ohio investors gain access to entity-friendly financing that aligns perfectly with asset protection and tax deduction strategies.

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Where Deductions Are Especially Valuable in Ohio

• Cleveland (44114, 44115): Strong rental demand in urban cores—higher operating expenses = more deductions.
• Columbus (43215, 43219): New construction and student rentals near Ohio State provide depreciation and repair write-offs.
• Cincinnati (45202, 45220): Historic homes offer cost segregation opportunities for accelerated depreciation.
• Dayton (45402): Affordable properties mean smaller mortgages, but expenses like repairs and insurance remain deductible.
• Toledo (43604): High cap rates and moderate taxes create significant deduction opportunities.

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External Resources for Ohio Investors

• Ohio Real Estate Commission – Licensing and compliance
• Ohio Association of Realtors – Advocacy and market insights
• Ohio Department of Taxation – State tax rules for landlords
• Greater Cleveland Real Estate Investors Association – Networking and education
• Columbus Realtors – Market trends and investor support

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Q&A: How to Deduct Rental Property Expenses on Your Taxes

Q1: Do I need to show a profit to deduct rental expenses?
A: No, deductions can create paper losses that offset other income.

Q2: Can I deduct property management fees in Ohio?
A: Yes, management fees are fully deductible.

Q3: Is depreciation optional?
A: No, the IRS requires depreciation—even if you don’t claim it, you’ll face recapture taxes later.

Q4: What if I use part of my property as a personal residence?
A: Deductions must be prorated based on the portion rented versus personal use.

Q5: Can I deduct repairs immediately?
A: Yes, but capital improvements must be depreciated over time.

Q6: How do DSCR loans affect deductions?
A: They don’t limit deductions—mortgage interest, insurance, and depreciation remain deductible.

Q7: Can I deduct travel costs for out-of-state properties?
A: Yes, provided the primary purpose of travel is property management.

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Find the Right Financing for Your Real Estate or Business Project

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Why GHC Funding is the Go-To Lender for Ohio Investors

• LLC-Friendly Financing: DSCR, SBA, and bridge loans structured for entities.
• No Income Documentation: DSCR approvals based on rental cash flow.
• Flexible Loan Options: From $100K to $15M with competitive terms.
• Market Expertise: Deep understanding of Ohio’s diverse investment landscape.

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Final Thoughts

Understanding how to deduct rental property expenses on your taxes is key to maximizing profitability. From mortgage interest and repairs to depreciation and property management fees, these deductions can drastically improve your bottom line.

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Get Started Today.

👉 Ready to finance your next Ohio rental and maximize deductions?
Visit GHC Funding or call 833-572-4327 to explore DSCR loans, SBA financing, bridge loans, and alternative real estate funding solutions tailored for investors.

Get a DSCR loan in Ohio.

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Download Rental Property Tax Deduction Checklist (Ohio-specific PDF)

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