Depreciation isn’t just a tax term, it’s a strategic pillar of long-term real estate wealth.
Let’s talk about the least sexy, but most powerful pillar of real estate investment: Depreciation.
It’s the one that rarely gets discussed in real estate circles, but when you understand it, it can change the entire way you look at your portfolio.
Depreciation is the IRS allowing you to “lose value on paper” while still growing your property’s worth in real life. It’s a built-in tax break that reduces your reportable income without costing you a dime out of pocket.
What That Really Means
Let’s say you’re making $10,000 in annual net rental income. Depending on your tax bracket, that could mean paying a few thousand in taxes—unless you factor in depreciation.
Now, that same $10,000 might be reduced to $4,000 in taxable income, lowering your tax burden significantly. That’s not loophole magic. That’s intentional tax planning built into the real estate system.
In 2024, one of our clients didn’t understand why their CPA was asking for property values and appliance info. We broke down how depreciation shields part of their income from being taxed, and they were shocked. “You mean I’ve had this write-off the whole time and never used it?”
Yep. It’s quiet. It’s powerful. And it’s underused.
The Bigger Picture
Depreciation is one of the reasons real estate stays undefeated when it comes to tax efficiency.
It’s not just what you make, it’s what you keep.
At RPM Regions, we help you work with your CPA to track depreciation schedules, improvements, and what happens when a property sells (hello, recapture). Because we’re not just collecting rent, we’re helping you build strategy.
Blog 4: Appreciation—Why Smart Investors Stop Chasing Unicorns drops tomorrow.
Let’s build wisely.
Stephen & Phyllis Guasp
RPM Regions
Your trusted partner in Real Estate Asset Management
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