on the face of it this property is going to cost you 163,500 plus closing costs and the gross rent exclusive of vacancy costs. your 1450 monthly rent annualized is 17400. which means that your gross return on cash invested is approx 10.6% you then need to deduct maintenance, property management, taxes, insurance. this will reduce your net cash on cash return to well under the gross number. this may be a great house if you were to live in it but the numbers just don't work out well as an investment. there are properties in other markets and perhaps even in your own market that sell for under 40,000 and would rent for 600 a month. this would generate a gross return of approx. 18% . in this case you could possibly end up with a 12-15% net cash on cash return.

There are some deductions just not the 250k.

In response to the deduction of the 5% if self managing: I like to include an 8% mgmt. fee paid to myself when factoring expenses for two reasons:1.

Shiller says prices could fall another 25%, the mortgage interest deduction may go away, interest rates have been rising.

I also paid lawn fee and utility and also did pest control.Can I include all this expenses on my rental expense tax deduction ?

With regard to the 2nd lien, that expense will need to be paid by the seller or will be deducted from the discount.

Mortgage interest deduction taken by daughter (somehow).

You need to get a W-9 and send him a 1099, he should not have extra taxes for the materials because he can deduct those purchases.

In Florida, if the property is not your homestead, then you miss out on a homestead exemption deduction, therefore your taxes will be higher.

Buying discounted rental properties for long-term hold with cheap money in a TAXABLE account, in order to take advantage of deprecation and deductions.2.