Sounds like you bought the place well before the rule of FHA loans never lose MIP.

Most banks seem to finance up to 80% of the equity and there are rules of course around how much LTV you can carry).

In fact, illegal on two fronts: it is against the IRS rules (yes, believe it or not, you are required to take deductions you incurred), and it can be construed as mortgage fraud if you overstated your actual income by hiding your business costs.Finally, as @Nicholas Aiola pointed out, all competent lenders add back depreciation during underwriting, so depreciation should not be changed for lending.

@Bob Malecki, there are some strange rules governing reverse mortgages.

There are rules that would allow you to sell your residence tax free. 

A rule of thumb that I hear a lot is the 1% rule where you want your monthly rental amount to be at least 1% of the purchase price.

I was looking for something under 100K to shoot for the 2% or there about rule but am having a tough time.

I'm not a CPA so you should consult with yours, but these are the basics for your situation.Capital gains exemption on personal residence - This is the 2 years out of 5 rule, if you've lived in a home as your primary residence for 2 out of the last 5 years you get a capital gains exemption of $500k since you're married (it'd be $250k if you were single) Meaning the home can appreciate $500k or less and you'll pay no capital gains as long as you meet this 2 out of 5 requirement.

I am starting to read up on real estate investment and quickly realized that investing close to where I stay(California) is not possible as 1% rule does not really apply here.

They has a set of rules that mortgages must meet for them to be able to buy a mortgage.