Famous Short-Term Rental Markets Where the Bonus Depreciation Math Doesn't Pencil

The DepreciMax STR Bonus Depreciation Market Study tracks 197 US short-term rental markets. Fifty clear the Bronze medal threshold and are ranked in the Top 50 leaderboard. The remaining 147 do not. This document lists all 147, sorted by median bonus-eligible percentage of purchase price, ascending — the weakest first. For each market it documents land value ratio, state §168(k) conformity status, and the primary reason the tax math fails.

Why some famous STR markets fail DepreciMax's bonus depreciation thresholds

Two variables dominate short-term rental bonus depreciation outcomes: the land value ratio (the higher the land component of a property's purchase price, the smaller the depreciable structure base) and the state §168(k) conformity status (whether the state permits the federal deduction to flow through to the state return). When one variable works against a market, the tax math often still pencils. When both work against a market, it very rarely does.

The 147 markets in this document fail to clear even the Bronze threshold (median bonus-eligible ≥ 18%). They are not investment-hostile markets in any general sense — many are among the strongest STR revenue markets in the country. They are markets where the specific slice of the return called federal §168(k) Year-1 bonus depreciation does not carry the offer.

The three failure modes

Every market in the appendix is classified into one of these failure categories. The classification reflects the dominant reason the market misses the Bronze threshold; some markets fail on multiple dimensions simultaneously.

Full appendix — all 147 markets that did not make the cut

Sorted by median bonus-eligible percentage of purchase price, ascending. All 147 markets tracked in the DepreciMax Study but excluded from the Top 50 leaderboard for the 2026 edition. Each row includes the median bonus-eligible percentage, median land value ratio, state §168(k) conformity classification, and primary failure mode.

How to interpret "did not make the cut" when making offers

A market appearing in this list is not a warning against buying there. It is a warning against relying on federal §168(k) bonus depreciation as a primary offer-price justification in that market. The distinction matters because bonus depreciation is often invoked in negotiation discussions where it is not, in that specific market, doing the work being claimed.

Three practical uses of this list:

1. Filter your shortlist. Markets in this document are not viable Diamond / Gold / Silver / Bronze candidates for the median property. Individual outlier properties may still clear the thresholds — verify at the property level rather than assuming market-level yield.
2. Frame the CPA conversation. If you are already invested in a market on this list, this document explains, honestly, what the tax math is doing — and what it is not. A CPA can use this framing to right-size expectations for the return the client actually filed.
3. Recalibrate market comparison. Investors comparing STR markets by revenue often assume tax outcome scales similarly. This document is the counterexample. Two markets with identical STR revenue can produce very different after-tax returns because of the tax math documented here.

Detailed methodology, data sources, per-listing estimation approach, and calibration procedure are documented in the Study methodology. The weighted national distribution and medal threshold provenance are documented in the National Curve publication.