
Tony Robinson, one of the coaches for our local Mastermind coaching groups, wrote the following article on the value of depreciating your properties. Depreciation gives you HUGE tax advantages which is a large income stream that not everyone considers when they’re contemplating becoming a landlord.
I hope the following explains some of the advantages you may not have considered. If you have any questions about depreciating properties, please add them here to the comments section so we can clear up any confusions.
Here’s a synopsis of Tony’s article:
Many of us using the long term hold strategy fail to capitalize on one of the true benefits of owning real estate. Though the benefits are many, I find the ability to offset income by maximizing depreciation to be the most valuable of all. Did you know that depreciation allowances offset the gross income received on real estate?
Let me explain. The IRS extends the benefit of depreciation to owners of rental property. Here, the government is actually giving us an incentive to own real estate! The depreciation factor for single family residential property is 27.5 years. This means that you can take depreciation on the “dwelling” spread out over 27.5 years.
An example of how depreciation works is as follows:













