Only the BUILDING portion of your property is depreciable for tax benefits

Michael ChangNov 1, 20250m 6s1.2K viewsScore 75
Pricing & Profitability
intermediate
Tax Strategy
Market Research
Profitability
Expenses
M

Summary

AI-generated

When investing in STR properties, the type of market can significantly impact depreciation and tax benefits. Beach and desert markets often have higher land values (30-50%), resulting in lower depreciable basis compared to mountain, forest, or lake markets (10-30% land value). The higher the depreciable basis, the higher the potential tax savings.

Key insights

  • A mountain property can potentially offer 2x the depreciation of a beach property with the same purchase price due to the land-to-building ratio.

Mistakes to avoid

  • Don't base your entire property purchase decision solely on the land-to-building ratio; consider projected revenue, expenses, mortgage rates, and regulations.

Curated by Learn STR by GoStudioM · Summary & key insights generated by AI · Reviewed by editorial