What counts as a deductible advertising expense
To attract tenants, landlords spend money on listing platforms, signage, and marketing. These are ordinary and necessary business expenses deductible on Schedule E in the year paid. Qualifying expenses include:
Online listing fees paid to platforms such as Zillow Rental Manager, Apartments.com, Craigslist, and similar services. Fees charged per listing or as a monthly subscription both qualify.
Print advertising (newspapers, flyers, postcards) and physical signage — yard signs, directional signs, banners. The cost of signs is deductible in the year purchased if they are not permanent fixtures.
Professional photography and virtual tour costs for the listing.
Website costs if you maintain a dedicated rental property website (hosting, domain, photos).
Property management company advertising fees — if your manager charges to advertise vacancies, that cost is part of the management fee and is deductible.
Tenant screening costs
Tenant screening expenses — background check fees, credit report fees, and eviction history searches — paid by the landlord are deductible as operating expenses. If you pass these costs on to applicants as application fees, those fees are rental income to you; you still deduct the actual screening cost.
Application fee income is taxable regardless of whether the applicant is approved. If your screening platform bills you per report, deduct that cost. If you use a flat-fee service, deduct the annual or monthly subscription fee proportionally to the rental activity.
Documenting the deductions
Keep receipts and invoices for all advertising and screening costs. For recurring platform subscriptions, your credit card statement or email invoice is sufficient. For screening services, a printout of charges per applicant is ideal but not always available — a platform billing statement works.
One nuance: if you are trying to rent a property that you also use personally (a vacation home rented for part of the year), advertising costs must be allocated between the rental and personal periods. For a dedicated rental, 100% of advertising costs are deductible with no allocation required.
Frequently asked questions
Are Zillow listing fees deductible?
Yes. Fees paid to rental listing platforms are ordinary and necessary advertising expenses, deductible on Schedule E in the year paid.
If I charge an application fee to tenants, can I also deduct the screening cost?
Yes, but the application fee you collect is rental income. The background check or credit report cost you pay is a deductible expense. Both sides flow through your Schedule E.
Are advertising costs deductible before the property is rented?
Yes, once you place the property in service for rental and begin advertising, costs incurred to find tenants are deductible. Pre-rental startup costs before the property is available for rent have their own rules.
Sources
Educational information and estimates only. Not tax advice. Tax rules change and vary by situation; consult a qualified tax professional before acting.