I have quite a few clients who own rental properties that generate actual cash flow, but because of the depreciation expense of the properties generate actual tax loses.
Over the years, I have had clients that were reluctant landlords. With personal changes in their lives they found that they now had a rental property to address. Marriage and inheritance were the usual causes for such a change.
What surprised me most about these clients is that they do not want to run their rental like a business. I have had multiple discussions about charging a rent that covers all of the costs of the property. There was great reluctance to raise the rents, because they were fearful that the tenants would move out if the costs increased. Then the losses would be greater at that point. Never quite believing that someone else may actually be interested in paying the going rental rates.
So now my clients have an actual cash flow loss to go with their tax loss.
If you have a rental property have you done an analysis on the rents in your area to ensure that you have a competitive listing?