To be more accurate you have to include the amount you have to cough up as
Income tax to Uncle Sam. In your example, if mortgage interest is $1000, then
Tax = 30% of (2600 – (1000 + 235 + 423)) = $500 and there goes the positive
ROI. Add to the mix, the percent time the property is vacant. Beyond that, I will
remain optimistic that our friends in DC would not put a pitchfork into mortgage
interest deduction for rental properties as part of tax code reform. One consolation would be the equity you build up over time thanks to your tenant.
