Rental Property Investor · Houston, TX · Member since 2018 · 70 posts · 33 votes
Hi. My renters absolutely destroyed beyond regular wear and tear (playdoh ground into carpet and dog stains and rips) the carpet that I had installed in the unit just before they moved in. They were there 3 years. I will need to replace the carpet in the entire upstairs (downstairs is tiled) and I would like to install vinyl instead upstairs. If I do this - can anyone advise how I would itemize/document/calculate the cost to the renter for the carpet replacement for the purposes of justifying the deduction from their deposit?
Carpet has a 5 or 9 year depreciation depending on your tax strategy. The Department of Housing and Urban Development uses the 7 year guideline which is what we use. I also include a general rule of 3 turnovers typically means new carpets should be expected. With great tenants you can absolutely get carpet that lasts longer.
Have your installer to bid both carpet and vinyl. Prorate the cost to replace just the carpet. Using the 7 year rule the tenants would be responsible for ~57% of the replacement cost.
Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 936 votes
3y
You can get a few quotes to replace the carpet with a similar grade of carpet to establish the cost. The tenant would pay to replace the carpet and you could do whatever you want from there.
Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
3y
Aloha,
You would also need to account for the depreciation of the three year old carpet. I believe carpet is either 5 or 7 year life for IRS purposes, so you will be around 50% depreciated.
Carpet has a 5 or 9 year depreciation depending on your tax strategy. The Department of Housing and Urban Development uses the 7 year guideline which is what we use. I also include a general rule of 3 turnovers typically means new carpets should be expected. With great tenants you can absolutely get carpet that lasts longer.
Have your installer to bid both carpet and vinyl. Prorate the cost to replace just the carpet. Using the 7 year rule the tenants would be responsible for ~57% of the replacement cost.
You can get a few quotes to replace the carpet with a similar grade of carpet to establish the cost. The tenant would pay to replace the carpet and you could do whatever you want from there.
Thank you. So that would be legal and they wouldn't be able to claim I charged them for something I didn't install?
Carpet has a 5 or 9 year depreciation depending on your tax strategy. The Department of Housing and Urban Development uses the 7 year guideline which is what we use. I also include a general rule of 3 turnovers typically means new carpets should be expected. With great tenants you can absolutely get carpet that lasts longer.
Have your installer to bid both carpet and vinyl. Prorate the cost to replace just the carpet. Using the 7 year rule the tenants would be responsible for ~57% of the replacement cost.
You would also need to account for the depreciation of the three year old carpet. I believe carpet is either 5 or 7 year life for IRS purposes, so you will be around 50% depreciated.
considering that it has been in use for just 3 years as opposed to 7 years, I would take good pictures and videos of the property. This could help substantiate for the need to replace in three years, not 7. make sure to talk to your tax guy