Unlocking the Power of Depreciation in Real Estate

🔑Depreciation is a tax incentive given by the government to recover the cost of purchasing rental property.

💰By understanding and utilizing depreciation, you can leverage earning income in real estate and pay zero percent in taxes.

🏠Depreciation covers the recovery of costs for all business property inside your rental property, such as appliances, flooring, and windows.

📆Assets inside your rental property are depreciated over their useful life, which can range from one to 27.5 years.

💡Accelerating depreciation through a cost segregation study can help reduce taxable income and maximize tax benefits.

What is depreciation in real estate?

—Depreciation in real estate is a tax incentive given by the government to recover the cost of purchasing rental property. It allows you to deduct the cost of the property over its useful life.

How does depreciation help in real estate investing?

—Depreciation helps in real estate investing by reducing taxable income. It allows you to leverage earning income in real estate and potentially pay zero percent in taxes.

What assets can be depreciated in rental properties?

—Assets such as appliances, flooring, windows, and other business property inside your rental property can be depreciated over their useful life.

What is the useful life of assets in rental properties?

—The useful life of assets in rental properties can vary, typically ranging from one to 27.5 years. This depends on the asset class and the category it falls into.

How can I accelerate depreciation in real estate?

—You can accelerate depreciation in real estate through a cost segregation study. This allows you to re-categorize assets and place them into shorter depreciation schedules, reducing taxable income.

00:00Welcome back! Today we're talking about the power of depreciation in real estate.

01:13Depreciation is a tax incentive given by the government to recover the cost of purchasing rental property.

03:35By understanding and utilizing depreciation, you can leverage earning income in real estate and potentially pay zero percent in taxes.

07:46Business property inside your rental property, such as appliances, flooring, and windows, can be depreciated over their useful life.

11:09Assets in rental properties have a useful life, typically ranging from one to 27.5 years, and are depreciated accordingly.

08:29Accelerating depreciation through a cost segregation study can help reduce taxable income and maximize tax benefits.