What's your STR's true Year-1 return — with bonus depreciation factored in?
Enter your numbers. See the side-by-side: cash flow alone vs. cash flow plus the Year-1 federal tax savings most investors only discover months after closing.
Your STR Inputs
Without Bonus Dep
7.1%
Year-1 cash-on-cash return
NOI$53,000
Annual debt service$51,946
Annual cash flow$1,054
Cash invested$212,500
With Bonus Dep ✓
42.3%
Effective Year-1 return
NOI$53,000
Year-1 §168(k) deduction$187,000
Federal tax savings$59,840
Cash flow + tax savings$60,894
Cash invested$212,500
The Year-1 Difference
+$59,840
in Year-1 cash benefit you'd otherwise miss — that's 35.2 pts of additional cash-on-cash return
Federal §168(k) bonus depreciation assumes the property qualifies for the STR exception under IRC §469(c)(2) and the taxpayer materially participates. State conformity not modeled. Not tax advice — verify with your CPA.