Costs, all of which are deductible vs your rental income:
Property Tax
Mortgage Interest
Insurance
Utilities not paid by tenant
Maintenance
Cleaning
Advertising
Property Management if you use a service
Bounced check fees, collection fees, court costs, etc
Note that when (not if) you have a rental loss, you get to suck it down, you can’t apply it against your regular income.
Things which must be depreciated:
Closing costs
Improvements
In your projections make sure you include allowances for vacancy, in SoCal that’s somewhere between 5-10%.
Do you understand what Cap Rate means? If not, go learn it. I don’t buy property at less than a 10% cap rate. You won’t find anything like that around San Diego though, you’ll be lucky if you get 5%.
