How to find high depreciation STR properties

Bonus depreciation doesn't treat all short-term rentals equally. Two $600,000 properties in different markets can have a $60,000 difference in Year 1 deductions — and you'd never know it from the listing. Here's how to read a property's depreciation signal before you make an offer.

The four signals that predict bonus depreciation potential

A property's bonus depreciation potential is determined by how much of its purchase price is allocated to bonus-eligible assets — 5-year personal property and 15-year land improvements — rather than 39-year structural components or non-depreciable land. Four signals, all publicly available or visible in listing photos, drive that allocation:

Signal 1: Land value ratio — the biggest driver

When you buy a property, your purchase price is split between the underlying land and the improvements on it. Land is not depreciable at all. Only improvements are. So the higher the land value as a percentage of purchase price, the smaller your depreciable basis — and the smaller every depreciation deduction that flows from it.

A cabin in Gatlinburg, TN priced at $500,000 might have a county assessor land value of $35,000 — a 7% land ratio. That means $465,000 is depreciable improvements. A beachfront condo in Miami priced at $500,000 might have a land ratio of 50% or more. Your depreciable basis just dropped to $250,000 before you've even thought about how to classify the components.

What to look for: County assessor records show the assessed land value vs. improvement value for every property. Search the address on your county's property appraiser website. A land ratio below 20% is a strong bonus dep signal. Above 40% and you're fighting uphill.

Signal 2: Property age and renovation history

A newer property segregates better. Here's why: the IRS classification of a building component often depends on whether it's "structural" or "personal property." The tests are nuanced, but newer construction tends to have:

• Mini-split HVAC (wall-mounted, not ducted through walls) — classifies as 5-year personal property vs. 39-year structural for traditional ducted systems
• Modern electrical panels and smart home systems — 5-year property
• LVP and hardwood flooring (laid over subfloor, not embedded) — 5-year personal property vs. embedded tile that's structural
• Frameless glass shower enclosures — 5-year; older built-in tile shower surrounds are more likely 39-year

A listing that says "gut renovation 2022" or "built 2021" is a strong signal. Look for those phrases in the listing description.

Signal 3: Reading finishes from listing photos

This is where STR investors have a real advantage: vacation rental listings are heavily photographed. Where a long-term rental might have 8 photos, a top-performing STR listing has 40–60. That visual data is enormously useful for estimating bonus dep.

In listing photos, look for:

• Outdoor amenities (highest value) — pool, hot tub, fire pit, outdoor kitchen, pergola. Every one of these is a 15-year land improvement and 100% bonus eligible. A property with all five can have $80,000–$120,000 of outdoor amenities alone.
• Kitchen quality — commercial-grade appliances, stone countertops, custom cabinetry. The more "hotel-like" the kitchen setup, the more 5-year personal property you'll find.
• Flooring — hardwood and LVP are 5-year; embedded tile is structural. Scan photos for tile vs. wood in the main living areas.
• FF&E — Is the property sold furnished? A fully furnished STR can include $60,000–$90,000 of furniture, TVs, cookware, and linens — all 5-year personal property if they convey with the sale.

Signal 4: Condo vs. single-family

Condos behave differently than single-family homes in a bonus dep analysis, and not always the way you'd expect.

On one hand, a condo owner has $0 in land value for their individual unit — the land is owned collectively by the HOA. That's a strong positive: your entire purchase price is allocated to improvements.

On the other hand, the structural components of a condo (exterior walls, roof, hallways, elevators) are also shared — you can't do a cost seg study on things you don't individually own. What you can segregate is your unit's interior components plus a pro-rata share of common area land improvements (pool, fitness center, parking lot).

In markets where land values are high, a condo's $0 land allocation makes the math very attractive even if the segregable interior is modest.

Markets that consistently score high

How to screen properties at scale before you make an offer

Manually pulling county assessor data, scanning listing photos, and estimating component values for every deal you're considering is time-consuming. The practical workflow:

1. Screen by market first — target zip codes with strong historical bonus dep scores (low land ratios, high amenity density). DepreciMax's zip-level search scores every market on these four signals.
2. Filter by property type and amenities — within a target market, filter for newer builds, pools/hot tubs, and fully furnished listings.
3. Run a property-level estimate on finalists — for your top 3–5 deals, upload listing photos to get a full IRS §168(k) line-item estimate. This takes about 60 seconds and produces a PDF you can share with your CPA.
4. Bring the estimate to your CPA before closing — a qualified STR CPA can validate the estimate, model the tax impact against your specific situation, and advise on whether a full cost seg study is warranted after closing.

The goal isn't to be precise before closing — it's to know whether the bonus dep story is strong enough to factor into your offer and your hold strategy.