Rental income is not considered investment income. It's considered passive business income. That's why it gets reported on SCH E and not SCH C or anything else. The investment income is not seen or realized until the tax year you sell the property.
It is not common for rental property to show a profit "on paper" at tax filing time. In fact, it's more common to show a loss on rental property every single year you own it and rent it out. Especially if there's a mortgage on the property.
When you add up your deductible expenses of mortgage interest, property taxes and property insurance and include that with the depreciation you're required to take by law, those deductions alone will commonly be more than the rent you collect for the entire year. Add to that the other rental expenses you're allowed (such as repairs, maintenance, etc) and you're practically guaranteed to operate at a loss "on paper" every year when you file your taxes.
It's more common for you to operate at a loss every year "on paper" at tax time, with your losses being carried over to the next year. So your carry over losses will just grow and accumulate every year until the tax year you sell or otherwise dispose of the property.
All of your carry over losses are deducted in the tax year you sell/dispose of the property. So while not impossible, your chances of showing a taxable gain on your rental income on your tax return each year are not all that great.
