Ed Neuhaus If you’re in real estate, you should be talking about this.
The new tax law has cemented 100% Bonus Depreciation for Short-Term Rental investors. This is huge news for anyone in the STR space.
What This Means for STR Investors:
Bonus depreciation allows real estate investors to immediately deduct the cost of qualifying property improvements in the year they’re placed in service, rather than spreading the deduction over many years.
For short-term rental investors who actively participate in their business (meeting material participation requirements), this can result in significant tax savings in year one of ownership.
Key Benefits:
- Immediate Tax Deductions: Write off furniture, appliances, and improvements in year one
- Offset Active Income: STR investors who materially participate can offset W-2 income
- Accelerated Wealth Building: Reinvest tax savings into additional properties
- Permanent Legislation: This isn’t a temporary measure — it’s here to stay
If you’re considering an STR investment or want to understand how this affects your current portfolio, let’s connect. Understanding the tax implications is crucial for maximizing your returns.
Originally posted on LinkedIn July 2025
Want to understand how bonus depreciation stacks with other tax strategies like 1031 exchanges, passive loss rules, and the new SALT deduction cap? Read the Complete Guide to Real Estate Tax Benefits (2026).
How Much Could You Save With Cost Segregation?
Example study: a $623,000 rental property paired with a $2,000 cost segregation study yielded $23,610 in year-one tax savings, an 11:1 payback ratio. Numbers vary by property.
Affiliate disclosure: Neuhaus Realty Group may earn a referral fee if you engage RE Cost Seg through this link. We only recommend partners we would use ourselves.
