As a non-resident, you’ll only be taxed on U.S. income sources, like rental income, which you’ll report with allowable deductions.

STRs give you more tax benefits upfront, but it’s wise to choose a property that could perform as an LTR just in case for stability.Using HELOC for Down Payment:The interest on a HELOC used for investment can potentially be tax-deductible, so using it to supplement your down payment could work in your favor.

This needs to be highlighted in the lease and acknowledged by them.Security Deposits: You can’t use their security deposit for routine cleaning, but if they leave things in bad shape beyond normal wear and tear, it’s fair game to deduct cleaning costs.I’d start by having a straightforward talk with them about the importance of keeping things clean for health reasons and property preservation.

When evaluating long-term real estate opportunities, keep in mind the four key pillars of investing:Appreciation – Focus on how your property’s value grows over time.Cash Flow – Assess your rental income after accounting for all expenses.Tax Benefits – Leverage deductions like depreciation to reduce your tax burden.Debt Pay Down – Use rental income to pay down your mortgage, steadily building equity.Think of it like investing in a 401(k) with a long-term perspective—especially in California, where property values can appreciate significantly over time.

And 0% deduction on expenses related to the live in unit.

The "Deductions" column shows their first payment and the column on the right shows their second payment.

Do you know if it is possible to have a tax deduction for interest/profits earned on promissory notes/PML?

Points will be deducted for deficiencies and remove subjectivity in the inspection process.

I can run the numbers for NOI-depreciation and this holds true, but not all of the operating expenses are deductible (or at least maintenance, vacancy and cap ex aren’t until that money is spent).

Hallway utilities are around $25 a month and tax deductible meaning net cost around $17.50.