Learn How to Maximize Bonus Depreciation on STR-Ready Homes
Why Land-to-Improvement Ratio Matters
The High Desert Gives STR Investors a Unique Tax Advantage
Most investors know STRs can generate strong cash flow.
What many
don’t realize is that where you buy can dramatically impact your tax savings — especially when it comes to bonus depreciation.
In the High Desert, homes typically sit on low-cost land (often just 10–15% of a property’s value) while the rest — 85–90% — is considered improvements (the building itself, systems, finishes, etc.).
Why this matters:
- Land cannot be depreciated
- Improvements
can be depreciated and accelerated
This means:
A High Desert STR gives you more depreciable value, which means larger first-year write-offs and stronger overall ROI.
It’s one of the biggest reasons experienced investors choose Joshua Tree, Yucca Valley, and surrounding markets.
Example Breakdown
How a $500K STR Purchase Becomes a Major First-Year Deduction
Let’s look at a simple, real-world example to show how powerful this can be:
- Purchase Price:
$500,000
- Land Allocation (12%):
$60,000
- Improvements (88%):
$440,000
- Depreciable Portion:
$440,000
Bonus Depreciation Eligibility: A large percentage may be accelerated into Year One
What that means for you:
Instead of waiting 27.5 years to depreciate improvements, you may be able to deduct a significant portion — sometimes over $150K+ — in the first year (depending on your tax situation).
This is what allows STR investors to:
- Reduce taxable income
- Improve cash-on-cash returns
- Make STRs more profitable than many other real estate classes
- Recapture equity faster
- Reinvest quickly into additional STRs
This is
not tax advice, but it's why CPAs who specialize in STRs often point investors toward the High Desert.
The Countdown
Bonus Depreciation Is Being Reduced — Don’t Miss the Window
Bonus depreciation has been one of the most valuable benefits available to real estate investors.
But here’s the challenge:
Bonus depreciation decreases each year and is on track to phase down unless new legislation changes the timeline.
This has created a wave of motivated investors who want to:
- Optimize their tax position
- Acquire STRs with low land ratios
- Capture as much accelerated depreciation as possible
before the window narrows
Whether you’re a new investor or adding a High Desert STR to your portfolio, the opportunity to maximize first-year tax benefits is time-sensitive.
The earlier you buy, the more you may be able to deduct.
The later you wait, the less depreciation you may be able to capture.
Get the Simple Guide to STR Tax Savings — Written for Investors at Every Level
We put together a clear, beginner-friendly breakdown to help you understand:
- How STR depreciation works
- Why land-to-improvement ratio matters
- What bonus depreciation means for investors
- Why the High Desert offers some of the highest depreciable value
- What CPAs look for when evaluating STR deals
Whether you’re new to STR investing or managing multiple properties, this guide will help you make smarter, more profitable decisions.
