Single Family Rental
Project Overview
This single family beach house in Cape May was purchased with the intent of being a short term rental. The owners remodeled the kitchen with luxury appliances and improved the bathrooms, adding in a steam shower. The home was furnished with high end furniture as well. The house was constructed in 2018 and includes an integral garage, a pool, a game room, HVAC heating and air conditioning, and has 2800 sqft of livable space
The cost segregation study performed by Taxero Cost Segregation found $1,403,836 in assets that qualified for faster depreciation through 5 and 15-year property reclassifications. This led to a tax savings of $415,535 in the first year, thanks to 80% bonus depreciation. The study's impact goes beyond just the first year, with tax benefits worth $1,314,748 over 15 years. When reinvested, these savings will help the Multi-Family investors acquire another property faster, improving their return even more, showing just how valuable cost segregation can be for multi-family investors and real estate investors at large.
The total yield on depreciable 1st year assets achieved through this study was 35.5%. A very satisfactory result. This is accounted for by the 5yr and 15yr assets reallocated.
The chart clearly illustrates how a depreciation strategy accelerates tax savings in the early years of ownership—showing significantly higher first-year and front-loaded deductions compared to the standard 27.5- or 39-year straight-line method. This visual highlights increased early cash flow, improved tax efficiency, and the power of unlocking hidden value within a single family rental property. It's perfect for demonstrating the immediate financial impact of a cost segregation study at a glance.