Interest on construction loans for rental properties is deductible if the property is intended for income generation. You can claim the interest as a rental expense during the construction period, but only if the property is ultimately used for rental purposes. Be sure to maintain detailed records, including loan agreements, and proof of intent to use the property for rental purposes. It's important to ensure that the interest is tied to the rental aspect and not for personal use of the property or loan proceeds. Documentation such as invoices and records of payments should be organized and kept for accurate record-keeping. These deductions can help reduce your taxable rental income during the construction phase.