Why Smart Landlords Love Depreciation More Than Rent

Summary

This video provides an advanced breakdown of why depreciation is a more powerful wealth-building tool for real estate investors than rental income alone. It explains that depreciation is a 'phantom expense' that reduces taxable income without affecting cash flow. The key takeaway for STR hosts is how to leverage a cost segregation study combined with the 'short-term rental loophole' to create significant paper losses, which can then be used to legally offset taxes on both rental income and high-earning W-2 or 1099 income.