Hiring a property manager does not create a new “rental deductible.” The term causes confusion because several different costs get mixed up—insurance deductibles, maintenance reserves, approval limits, optional protection plans, and even tax deductions. Here’s a clear breakdown of what owners in Los Angeles should expect, how deductibles actually work, and how TGN Property Management structures costs so there are no surprises.What people mean by “rental deductible”When owners ask about a rental deductible, they usually mean one of the following:
- Insurance deductible: The amount you pay out of pocket when filing a claim on your landlord policy (e.g., for a water leak or fire).
- Maintenance reserve or approval limit: Funds held and an approval threshold that let your manager act quickly on routine repairs.
- Optional “co-pay” fees: Some firms charge a small service fee per maintenance dispatch or offer rent guarantee/eviction protection plans with a per-claim deductible.
- Tax deductions: Whether management fees and other expenses are deductible on your taxes.
- Tenant renters insurance deductible: The deductible on a resident’s policy (that belongs to the tenant, not the owner).
None of these are a special “rental deductible” triggered by hiring Los Angeles Property Management. They’re standard parts of owning and operating a rental, and a good manager will explain how each one works before you sign.Insurance deductibles: what really appliesAs the owner, your landlord or commercial property policy carries a deductible—commonly $500 to $5,000 for smaller properties and sometimes higher for larger assets. That deductible applies per covered claim. Examples:
- Burst pipe damages a unit: You pay the deductible; your policy covers the rest up to the limit. Loss-of-rents coverage can replace income during repairs.
- Kitchen fire: Deductible applies to building repairs; ordinance or law coverage may pay for code-mandated upgrades.
- Liability claim (slip-and-fall): Most liability claims don’t have a deductible, but your umbrella policy might have a self-insured retention. Ask your broker.
In Los Angeles Property Management, separate catastrophe policies like earthquake and flood have their own deductibles (earthquake deductibles are often a percentage of the insured value). Your property manager doesn’t set these—your insurance carrier does. TGN Property Management coordinates vendors, documentation, and timelines to help you navigate the process efficiently.Maintenance reserve and approval limits: not deductibles, but importantMost management agreements include:
- A maintenance reserve: A small amount of your funds (often $300–$1,000) kept in your trust account to pay routine invoices quickly.
- An approval limit: The dollar threshold your manager can approve without contacting you (for example, $250–$500 for minor repairs).
These are not fees and not deductibles—they’re operational tools that keep your property safe and habitable without delays. You own the reserve funds. If a repair exceeds the limit (and it’s not an emergency), TGN Property Management seeks your approval before proceeding. In true emergencies, we act to protect the home and residents, then update you right away.
Optional protection plans and service “co-pays”Some Los Angeles Property Management companies offer add-ons like:
- Rent guarantee or eviction protection: May include a waiting period and a per-claim deductible or cap.
- Maintenance dispatch fee: A small owner “co-pay” each time a vendor is sent.
These are optional program designs, not industry requirements. TGN Property Management focuses on transparent pricing and will always disclose any optional program and its terms up front so you can choose what aligns with your risk tolerance and cash flow goals.Tenant charges and security deposit deductions
Owners sometimes think of deposit deductions as a “deductible.” They’re not—security deposits exist to cover unpaid rent, cleaning beyond ordinary wear, and tenant-caused damage. In California:
- You must provide an itemized statement and receipts within 21 days of move-out.
- California generally limits most residential security deposits to one month’s rent, with narrow exceptions for certain small landlords.
- In Los Angeles, properties covered by the Rent Stabilization Ordinance (RSO) have additional rules you must follow.
TGN Property Management documents condition at move-in and move-out, applies charges fairly, and communicates clearly so deposit accounting stands up to scrutiny.Tax deductions vs. deductiblesTax deductions are different from insurance deductibles. In most cases, owners can deduct ordinary and necessary rental expenses on Schedule E, including:
- Property management fees
- Repairs and maintenance
- Insurance premiums
- Mortgage interest and property taxes
- Utilities you pay
- Advertising, leasing, legal, and accounting costs
- Depreciation
Work with your CPA to optimize deductions.
TGN Property Management provides detailed monthly and year-end statements to make tax time easier.Renters insurance and the tenant’s deductibleMany Los Angeles Property Management firms require renters insurance. That policy protects the resident’s belongings and may cover tenant-caused damage to your property. The deductible on that policy belongs to the tenant.
Owners are not responsible for a resident’s renters insurance deductible. We can list the management company as “additional interest” to receive cancellation notices; this is not the same as additional insured.Who pays the insurance deductible when a claim happens?
Typically, the owner pays the deductible on the owner’s policy. If a tenant caused the damage, you may pursue reimbursement from the resident or their insurer, but collection is not guaranteed and depends on facts, documentation, and policy language. TGN Property Management helps preserve evidence, secure vendor reports, and communicate with carriers to increase the likelihood of a smooth recovery.How TGN Property Management handles costs—clearly and proactively
- Transparent agreements: We define the maintenance reserve, approval limit, and any optional programs in plain language. No hidden “deductibles.”
- Fast maintenance triage: 24/7 response to protect habitability and minimize damage, with photos and invoices for your records.
- Vendor standards: Licensed, insured vendors with competitive pricing and clear scopes of work.
- Insurance coordination: We request additional insured status where appropriate and can supply certificates to your carrier or vice versa.
- Compliance-first operations: We follow Los Angeles and California requirements on notices, deposits, and RSO procedures to reduce risk.
Frequently asked questions
- Can I raise my insurance deductible to lower premiums? Yes, many owners do. Make sure you keep adequate reserves to cover that higher deductible if a claim occurs.
- How big should my maintenance reserve be? Commonly $300–$1,000 for single-family and small multifamily. Larger buildings may keep more on hand to avoid delays.
- Do you mark up maintenance? Any vendor coordination fees or markups, if applicable, are disclosed in the management agreement. Ask us for our current policy.
- Will renters insurance cover owner deductibles? Sometimes a tenant’s liability coverage may reimburse owner costs if the tenant is legally liable, but it’s not guaranteed.
Key takeaways for Los Angeles Property Management
- There is no special “rental deductible” just because you hire a property manager.
- The deductibles that matter are tied to your insurance policies and any optional protection programs you choose.
- Maintenance reserves and approval limits are operational tools, not extra fees.
- Security deposit deductions, tax deductions, and renters insurance deductibles are separate concepts with their own rules.
- Clear agreements and strong documentation protect your NOI and reduce disputes.
Next steps
If you want a straightforward, no-surprises approach to Los Angeles Property Management, talk to TGN Property Management. We’ll review your goals, outline our reserve and approval process, coordinate with your insurance broker on deductibles and certificates, and set you up with clean financial reporting from day one—so your property is protected and your expectations are clear.