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Passive Income In Year 2 or 3 on Rental Properties
I have been buying single family homes for rentals the last 7 years. The question I have is everyone always talks about all the passive losses that come with properties. I typically experience a loss only the first year or two. After that my properties are no longer producing tax passive losses. Is this normal? I write off depreciation over 27.5 years, interest on mortgage, county taxes paid, insurance premiums paid, and all expenses for repairs.
Here a typical property in year 2 or 3 on schedule E of tax return.
Rents received $7,211
Auto expense ($175), maintenance ($98), insurance ($620), mortgage interest paid to banks ($1670), repairs ($962), taxes ($539), depreciation ($1908).
Total expenses $5,972.
Passive income $1,239.
Is anything missing. I guess this is a good problem but want to make sure I'm not missing anything. Again, I tend to only have a passive loss for a year or two at most before my properties show income. Is this normal?