As a real estate investor, you may use your home as your office.  Having part of your home as a business expense can allow you to depreciate some of the improvements to your home office.  The IRS has a depreciation schedule that helps you calculate the exact amount that can be counted toward your taxes.  Keep in mind that depreciation is a fixed expense that you should be accounting for anyway, not just some government giveaway.  The year you first start using your home you can depreciate it on your income.  You can do this by declaring this part of your home nonresidential real property.  You then use MACRS, as nonresidential real property using this method can be depreciated by using the straight line method.  For full information, see the IRS Publication 587.

A lot of people have been asking me what I think about mortgage interest rates as they sit here in March 2010.  Obviously, I am not going to be able to give you a definitive answer.  That said, a lot of things are working toward interest rates going up.  Not the least of which is the Fed no longer purchasing mortgages.  A larger thing to keep in mind for interest rates going up is the dramatic increase in the money supply created by the Fed.  Right now banks have by and large held on to this money.  They likely will not forever and when this money gets lent out to the public, inflation will go up and the Fed will be forced to increase interest rates generally.  I think now is even a more risky time for real estate investors.  Wait until the government subsidies of first time homebuyers and mortgages goes away.  When that happens you’ll see a small real estate recession, that will be your time to buy.

Here is a great resource put out that shows a heat map of the 2008 US Foreclosure Heat Map. This gives you a good idea where the mortgage and real estate markets have fell apart the most.