There are some policies (I forget which ones off the top of my head) that allow you to sue the tenant's insurance company for damage or loss arising from the tenant's misdeeds.

If you can't do that, I'd say you got an expensive experience from your loss as to dealing prudently.

you can always 1031 exchange the property for a new one and keep moving up from there. you can also take your profits to invest in a buy and hold and then use the losses at tax time to offset the gain.

Pete, your three justifications aren't necessarily true or prudent, your "investor" is in at 100% LTV, being fully leveraged is a concern when you have vacancies, what happens if you have an insured loss where the property can't be leased, loss of rents doesn't go forever and may be lower than actual rents?

No IRA...........still have 450,00 that I cam use for losses against capital gains in the next five years.  

More average areas they like to see 1.4 to 2 percent rent ratio.If you buy a marginal deal to resale you might have a loss or have your capital trapped and become an accidental landlord for awhile until you can get out of it.

We've found National Bank to be very investor-friendly; 20% downpayments and after a year if you show no rental income loss on your tax return they don't consider that mortgage payment in your debt to income ratio.

@Mike Flora,  Mike it is quite possible that the property taxes you paid did not need to have been a loss.

Only time will tell if you made the right decision in your purchase, and you can chalk up losses as lessons learned!

In other words in regard to stocks you could buy an averaged investment such as an indexed fund that is basically investing in a huge swath of individual stocks and your return is based on averaging out the returns and losses, limiting your potential return greatly, on the other hand in regard to stocks you can purchase them individually and your return is only based on that individual return.