In addition to what @Carl explained above, expenses such as ongoing expenses, not including any expenses that will be part of the cost of the property itself because they are capital improvements, paid before the property is available for rent can be considered start-up expenses.
Utilities, Insurance, etc: Costs you incur before you are actually in business of a rental activity are called start-up expenses. Special tax rules govern the deduction of these costs. Any expense that would be deductible as an operating expense by an ongoing business is a start-up expense when it’s incurred before a business begins.
Start-up Expenses: You can deduct up to $5,000 in these expenses the first year your rental is available for rent. For the past several years this limit has been $5,000. You’ll have to deduct any additional start-up expenses in excess of the first year limit in equal amounts over the first 180 months (15 years) you’re in business. This is referred to as an amortization deduction and is similar to depreciation but somewhat different. TurboTax will help you with this deduction.
To be clear, the only expense that is currently deductible is mortgage interest and real estate taxes on the personal part of your return with other itemized deductions on Schedule A.
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