Am I messing up by not having a mortgage on my rental property??

[Cory Dock]

Hi all,

I am a fairly new investor with 1 long term rental property.  Last year was the first full year it was rented. The property is paid off so I do not have a mortgage on it. Even with some repairs, I was not able to claim a loss on the property last year.


Am I messing up? My w2 income is under 100k, I have been told I can claim up to $25k in rental losses. If that’s the case, should I be looking into pulling the equity out of the house in the form of a mortgage to help generate a paper loss (I would estimate I could get a 100-120k mortgage). Would the loss offset the interest I pay on that mortgage?

I know I should be speaking to a CPA, I haven’t found the right one yet.  The rest of my tax/income situation is very basic. Head of household, standard deduction, sub 100k w2 income. 

Thank you!