Surv, let me know if I’m wrong, but it didn’t seem that you factored in the interest deduction in your tax savings (in that equation). Seemed like you only factored in straight line depreciation.

????

The mortgage interest is simply an expense (as are property taxes, insurance, depreciation, maintenance, property management, advertising costs etc). These are deducted from the gross rent received, you only pay taxes on the amounts that exceed real (most of them) and phantom (depreciation) costs.

The accounting in the other link took into account mortgage expenses by subtracting them from gross rents. There is no other interest deduction to factor in.