Likewise, your annual or quarterly or whatever property tax payment is expensed when paid, if you're on the the cash basis (which most people are) but you've already counted that in the reserves.Here is what your accounting software probably shows in the month that you paid the property taxes.Rental Income - $1000.00Expenses:Insurance:               30.00Property Mgmt:   100.00Mortgage Int:        350.00Property Tax:        700.00   Total Expenses:    1180.00Net Loss                   180.00So what you want to do is dump this report into excel in order to reconcile it back to your cash flow.Start with your Net Loss Number and then make adjustments until you reach your cash flow:Net Loss:        180.00Add Expenses Paid from Reserves:Property Taxes:  700.00Subtract Other Cash PaymentsMortgage Principal: $150.00Amount transferred to reserves:  $80.00Net Cash Flow:  $290.00Cash Flow is a completely separate calculation than Profit and Loss. 

Only the interest can be written off (and other operating expenses and depreciation) - paid down principal cannot. 

I currently have three properties that are 30 years loan with about 5.3 interest rate should I go ahead and start refinancing them into a 15 or 10-year loan or Do I just keep the original loan and just pay more towards principal to avoid refinancing and still keep the same cash flow.

If you were cashflow neutral you would still clear over 1k-2k per month off your taxes and principal paydown.

"Hey, you can only defer money from capital gains, and not the original return of principal???  

Other times lenders may require 6 to 12 months worth of principal and interest payment.

More chances of lender recouping their principal.4.

Have complementary skillsets and spell everything out in writing.I think folks just need to understand that buying rental properties is a business small medium or large... same principals apply like what your talking about.. just because in the US our lenders allow for this aggressive leverage situations for inexperienced investors does not mean one should just go hog wild  when they start..

You want that plus 90% of the principal at the end of five years. 

If they say they will provide one, add that amount to the principal amount on the most recent statement.