Single-Family Investment & Airbnb Units

This townhome unit was purchased for $175,000. An analysis indicated that 10%, or $17,500, should be allocated to the value of the land. The remaining $157,500 was allocated to the value of the improvements. The townhome was a two-story unit with two bedrooms, one full bathroom, and one half-bath. During our visit to the property we identified several components which qualified for accelerated depreciation such as carpet flooring, kitchen appliances, washer and dryer connections, data ports and cabling, window coverings, and special buildouts in the walk-in closets. Site improvements such as concrete paving, metal stair railing, wood fencing, landscaping, and a post-mounted mailbox also qualified for accelerated depreciation. As a result of the study we were able to segregate the $157,500 improvement/depreciable basis into the following depreciation classes:

5- year: $37,139
7- year: $315
15- year: $12,285
27.5- year: $107,761
TOTAL: $157,500

With 100% Bonus Depreciation the net first year depreciation was $53,494, with a first year tax savings of $19,793 and a payback ratio of 25:1.