Like anything else, keep your thinking cap on and hang on to your wallet. 

They don't own anything can be evicted for non payment of monthly rent or damage to the property.If they are not ready to buy by the time the option expires, you can have an option extension period with proper prior notice.HUD has some general lease option agreements: https://www.hudexchange.info/resources/documents/e...Also, BP has a top 10 list of documents needed for landlords.https://www.biggerpockets.com/renewsblog/2011/06/2...

This means that 50% of the home's basis, expenses, repairs, and improvements should be on Sch E while 50% of interest and taxes should be on Sch A.Any improvement costing over $2500 will most likely be capitalized and depreciated.

But speaking from rental property experience, and talking A LOT with my tax accountant over the years to better understand this...I think you may be confusing your Schedule A deductions with Schedule E deductions.What you describe is basically correct for your Schedule A deductions, such as the mortgage interest and property taxes on your primary home or a second home.But rental property Income/Expenses are recorded on Schedule E, and are subject to Passive Activity rules.

@Chris E.

Jennifer Toomey is there a benefit to using venmo vs e-transfer to collect rent?

Basically putting all the losses you show in a bucket, and then in future years when your Schedule E is in the green, you get to start taking the deductions at that point right back out of the bucket?

I know this won't be a popular opinion but my take is that market conditions don't really matter.

They thought I was the biggest A*****E around... and they were right!

Refer to IRS schedule E.