If you rent out only part of a property you need to be sure to account correctly for the expenses. If you rent only part of a property then you must divide the expenses between personal and rental use. You can deduct the rental portion of the expenses on Schedule E of your 1040 and the personal expenses (such as mortgage interest and property taxes) on the Schedule A of your 1040. If you have any expenses that belong only to the rental portion of the building, then these do not need to be divided.
For example, if you have an apartment attached to your home that you rent out then you must divide expenses such as mortgage interest and property taxes between the part of the home you live in and the part that is rented out. You can do this based on the square footage of the total house and the part you rent out. You must also divide expenses like homeowners insurance and utilities between the rental and non-rental portion. The non-rental portion of the insurance and utilities is not deductible on your tax return, but the rental portion is deductible as a rental expense on Schedule E of your 1040. If you have something like a phone line running only to the rental then this expense in fully deductible as a rental expense since it is not being used by the rest of the home.
If you have any questions about what is deductible as part of your rental and what expenses need to be divided then it is best to consult a tax professional.