top of page


Depreciation is a reduction in the value of an asset due to wear and tear. Residential rental property can be depreciated over 27.5 years. Commercial properties have a 39 year timeframe. This is a "paper loss" and not an actual income loss. Depreciation allows you to pay less total taxes, 100% legally. Depreciation is an investor's friend since it reduces the tax burden. You cannot depreciate land, but you can depreciate the buildings of the property.

If a residential investment property is worth $100,000, you can depreciate it over 27.5 years, or 3.636% each year. This would equate to ‘losing’ $3,636 each year in income. While the government does NOT charge you $3,636, you are able to write it off as a loss on your taxes, which can help minimize or eliminate your taxes. A commercial investment property depreciates over 39 years. This equals 2.5641% each year.

Commercial investment properties can benefit from depreciation, but can ALSO benefit from the ACTUAL appreciation of the investment. Please consult a CPA, financial advisor, or lawyer for more information as this is not legal, tax, or financial advice.

To learn more about the benefits of investing in multifamily properties, please visit our Knowledge Center. To find out how you can passively invest with our team, please schedule a time or contact us.


Commenting has been turned off.

H&K Investment Group

~Investing Together~

bottom of page