Accounting for an increasing portfolio

Lisa asks:
(updated on Wednesday, February 01st 2012)

I currently own my own home and one rental property. I am looking to increase the number of rental properties to around four in the next few years. Currently my income is low and I have around 25% equity in my home and in each rental property. I am trying to work out the benefits of putting the rental property into a LTC or something similar? Limited Liability would seem to be the obvious but I am not particularly concerned about that at this stage. I am interested in being able to deduct more expenses other than currently. My understanding is that I may be able to deduct things such as home office, cell phone and magazine subs but I wonder if there is a size limit on the business (e.g. is one property too small a business) to be able to deduct such expenses. I may be wrong but think these cannot be deducted if your property isn't in a business? I am also interested to know of the implications if I later wanted to refinance to pay down my own home mortgage.