Eventual loss of depreciation and mortgage interest

[Mark Stone]

Hey Everyone,

I was brainstorming about shielding rental income from taxes and had a few questions. Thanks in advance for any help you can provide.

Last year I bought a triplex with little money down, and took out an owner-occupied loan. I plan to move out within the year. When filing last year's taxes all of the rental income was shielded by writing off losses via a combination of depreciation, loan interest, fees for loan origination, other closing costs etc.

It got me thinking though as time goes on the amount of interest that I will be able to write off will decrease as more of my mortgage payment is on principal and not interest. Also, thinking really long term in like 27.5ish years when I won't be able to depreciate anymore that will be even less I can write off.

So my question is, do people who own a property for a long time eventually find it harder to shield their rental income (which would also have hopefully been going up as well). Is it a strategy to sell your property, and then do a 1031 exchange into a larger income producing property, take out another loan to cover the additional cost and therefore provide you with a new depreciation write-off as well as more mortgage interest to write off right off the bat?

Not sure if I am logically missing something here as taxes aren't my thing. Thanks!