When people think about real estate investing, most immediately focus on appreciation—property values rising over time. But if you're a savvy investor (or want to become one), it's time to pay attention to something less flashy but incredibly powerful: depreciation.
Depreciation is a tax benefit that allows you to deduct the cost of your investment property over time—typically 27.5 years for residential real estate. And while your property is likely appreciating in market value, the IRS lets you depreciate it for tax purposes, creating a paper loss that can offset your actual income. Translation? You might pay less in taxes while building wealth.
This isn’t just a perk—it’s one of the most strategic tools available to investors, especially those who hold rental properties. Depreciation can help you reduce your taxable income, increase cash flow, and maximize the long-term ROI of your property. And if you’re wondering whether this applies to you, it might be time to talk strategy.
At The Spera Group, we love helping clients look beyond the surface of a deal and tap into the real mechanics of wealth-building. Depreciation is just one of the many ways real estate works harder than you think.