“Top 7 Tax Deductions Every Real Estate Investor Should Know About”
ByOlivier
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2. Depreciation
Depreciation allows you to deduct the cost of your investment property over its useful life—even though the property may be increasing in value. For residential real estate, the IRS allows a depreciation period of 27.5 years; for commercial, it’s 39 years.
What Can Be Depreciated:
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The building itself (not the land)
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Major improvements like a new roof or HVAC system
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Appliances and equipment used in the rental
Why It Matters:
Depreciation is a paper loss. It reduces your taxable income without requiring any actual out-of-pocket expense during the year, making it one of the most valuable tax tools for investors.
