Does these Numbers Work as a SF Rental? Depreciation?

[Josh Gaddy]

Ok I think I might have one Finally! I used the cashflow worksheet from this board and came up Positive!!

Purchase Price: 32,900
Down Pay 6580
Loan Amt. 26,320

Yearly Cashflow Analysis

Gross Rent 7200
Vacancy (244)
Taxes (400)
Ins. (300)
Management (250) if i decide to use one
repairs (500)
Utils (150)
Advertise (100)
Lawn (200) I need lawnmower
Contingency (500)

Operating Inc $4512
Debt. Service (2100)
Pretax Cashflow 2412
Princ. Payments 259
Depreciation (1196)

TAXABLE INCOME $1,474 Does all of this look realistic?

50% Rule

7200/2 = 3600 - 2100(DS) = $1500 Is this right?

So I think that i did my math right. Does everyone agree with the numbers? Would you put in more expense since the house was built in 1930 and is a wood frame?

Also, I am still foggy on this depreciation thing. I havent grasped it conceptually quite yet. Am I subtracting it from profit so I can reduce my yearly income and write it off...it seems like in this case, I might really make 1500 or so dollars and only be taxed on 400 of it? I have read the depreciation threads and still havent gotten it, can anyone explain or guide me to a book or link that would lay it out for me?

Thanks in advance for any advice I can get. I appreciate your time and knowlede. I have learned so much (almost all) of what I know from this forum and have been working really hard to land a deal. I have been saved several times by you guys!!