MI Rental Property
Posted on | June 29, 2012 | No Comments
In addition to building a dividend income stream from a diversified portfolio of stocks, I also have a rental property. I initially purchased the property to live in but when I moved out of the vicinity for a new job I converted it into a rental.
Currently the property is operating as a loss and I’m able to deduct the loss against my income so it reduces my taxable income. Obviously, I would not recommend for someone to acquire a rental property with a net loss on a monthly basis but this is the situation I’m in and have to just accept it for now. Here are the details.
My net loss every month is $689. The Property taxes, HOA Fees, and Interest on the loan are tax deductible. Because I am not a real estate professional, I’m able to deduct these losses against my income reducing my adjusted gross income and ultimately lowering my Federal and State tax liabilities. Although this serves as a very good tax break, I’d rather the income at the very least cover the expenses and it would be ideal if the income exceeded the expenses.
On my to do list is to remove the Private Mortgage Insurance (PMI). I think requiring PMI should be illegal in its present form more on that in a future post.
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