A tax deduction that lets real estate investors write off the wear and tear of an income-producing property over time.
Depreciation is one of the most powerful tax benefits of real estate investing. The IRS allows investors to deduct the cost of an investment building over a set period (27.5 years for residential, 39 years for commercial) — even though the property typically appreciates in value. This phantom expense reduces taxable income without affecting actual cash flow.
Annual Depreciation = (Building Value − Land Value) ÷ Recovery PeriodAnnual depreciation equals the building value (excluding land) divided by the IRS recovery period.
You purchase a residential rental for $300,000. The land is valued at $60,000, leaving $240,000 in depreciable building value. Your annual depreciation deduction is $240,000 ÷ 27.5 years = $8,727 per year — a deduction that reduces your taxable rental income without any cash leaving your pocket.
Richify automatically calculates depreciation and other key real estate metrics for every property in your portfolio. Instead of plugging numbers into spreadsheets, you get instant analysis with built-in AI-powered insights to help you spot trends and opportunities across your holdings.
A US tax provision allowing investors to defer capital gains taxes by reinvesting sale proceeds into a like-kind property.
The percentage of gross rental income consumed by operating expenses.
The estimated market value of a property after planned renovations and repairs are completed.
The net cash a rental property generates after all expenses including mortgage payments.
Stop calculating real estate metrics by hand. Richify computes depreciation and 10+ other key metrics for every property in your portfolio.
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