The property is a condo in another city (about 4 hours drive) and I have a property manager that charges 12%. The tenants are the best I could hope for (no problems in approximately two years). I net about $200 a month after expenses.
I know there are relative advantages to selling and investing the equity elsewhere, but that's not my question. My question is: What are the tax advantages of holding onto it? I'm thinking not much. For instance, being able to deduct HOA fees, taxes, insurance, PM fees, etc. is not that attractive, as I see it, if they are canceled out by having to pay taxes on the rental income.
So the only other "advantage" is depreciation, which isn't an advantage at all in the long term because it has to be paid back upon sale (and I am planning to sell the property at some point in my lifetime). Even appreciation isn't much of an issue as this is a very modest condo and values are increasing very slowly. And of course any net profit has to be offset by commissions, closing costs, etc.
So what do all the landlords and former landlords out there think? I used to pay an accountant to do my taxes, and I asked him this question, but he couldn't, or didn't want to answer (given my experience with customer (non)service throughout my life, I wasn't surprised, but that's another story - but it is one reason I turn to informative forums like these). Thanks.
P.S. I anticipate that someone will suggest dropping the property manager. I realize that's an option, but let's assume it's not and focus on other fiscal fiscal advantages, if any, of continuing to own and be a landlord.
