You could do that if you do your own taxes and it would certainly be defensible, the losses are obviously deductible one way or the other.

The increase in value is not depreciable.However, the amount that you spent on the rehab itself is depreciable, although some of it could possibly be deducted immediately under a De Minimus Safe Harbor.Think about it this way - you want to depreciate the increase in value. 

I hear a lot of disaster stories about people struggling with the cheap insurers to get the funds they are owed quickly.I am willing to pay a higher deductible for a lower monthly premium.Any help with some suggestions would be wonderful.

You can deduct interest expenses on investments.

I paid the insurance deductible, a few hundred dollars back then.

In general you will be taxed on income earned on the rental and you can deduct interest paid on the mortgage. 

Insurance deductibles are not worth claiming on any side of this (Actual damage $1500, minus scrap).

Your landlordmust itemize any deductions from the full deposit amount.

Also consult an accountant, as a house hack would bring mortgage interest deduction benefits.Whichever nets you more, should be the answer.

Also, don't forget about your insurance company for damages, the adjuster will deduct normal wear and tear, you may also be entitled to rent lost while you are bringing the property back to a rentable state.