Morris Cost Seg Consultants

Short-Term Rental Properties

Cost segregation helps short-term rental owners accelerate depreciation, reduce taxable income, boost cash flow, and unlock significant IRS-approved tax savings in the first year.

Morris Cost Seg Consultants Specialties

Unlock Immediate Tax Savings and Accelerate Cash Flow – STR

Short-term rental properties—such as Airbnb, VRBO, and furnished executive rentals—can be incredibly profitable. But without the right tax strategy in place, many owners leave tens or even hundreds of thousands of dollars on the table every year.

Cost Segregation is one of the most powerful—and underutilized—tax strategies available to short-term rental property owners today.

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Rental Buildings

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Self-Storage Properties

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Short-Term Rental Properties

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Apartment Complexes

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Automobile Dealerships

At Morris Cost Seg Consultants, we specialize in helping STR investors legally reduce taxable income, increase cash flow, and reinvest savings faster through professionally engineered cost segregation studies.

If you own or are considering investing in short-term rental property, this strategy can dramatically change your financial outlook—often in the very first year.

What Is Cost Segregation?

Cost segregation is an IRS-approved tax strategy that allows property owners to accelerate depreciation by identifying and reclassifying certain building components into shorter depreciation lives.

Instead of depreciating an entire property over 27.5 years (residential) or 39 years (commercial), cost segregation separates qualifying assets into categories depreciated over 5, 7, or 15 years. This results in significantly larger depreciation deductions in the early years of ownership.

The outcome?
Lower taxable income, reduced tax liability, and more cash in your pocket now—not decades from now.

STRs Can Qualify as a Business Activity

Unlike long-term rentals, short-term rentals often qualify as an active trade or business rather than passive income—especially when the average guest stay is 7 days or less.

This distinction can unlock major tax advantages, including the ability to use depreciation losses to offset ordinary income, not just rental income.

Bonus Depreciation Supercharges Savings

Cost segregation pairs extremely well with bonus depreciation, allowing STR owners to deduct a large portion of identified assets immediately in the first year.

Even with bonus depreciation gradually phasing down, STR owners can still achieve massive upfront deductions that dramatically improve cash flow.

Maximizing Your Property’s Profit Potential

Short-term rentals typically include:

Furniture

Appliances

Flooring upgrades

Decorative lighting

Kitchen and bathroom enhancements

Smart home features

These components often qualify for accelerated depreciation—making STR properties especially cost-segregation friendly.

How Cost Segregation Works for Short-Term Rentals

At Morris Cost Seg Consultants, we follow a defensible, IRS-compliant process designed to maximize deductions while minimizing audit risk.

Step 1: Complimentary Feasibility Analysis

We begin with a no-cost, no-obligation analysis to determine:

Whether your STR qualifies
Estimated tax savings
Potential return on investment

Many owners are surprised by how much depreciation is available—even on properties they’ve owned for years.

Step 2: Engineering-Based Cost Segregation Study

Our team performs a detailed engineering study that:

Reviews construction costs and improvements
Identifies qualifying assets
Applies IRS-approved classification methods
Produces a comprehensive, audit-ready report

This is not a “software model” or rule-of-thumb estimate—our studies are backed by real engineering analysis.

Step 3: Delivery to Your CPA

We provide your CPA with everything needed to seamlessly integrate the study into your tax filings, including:

Asset breakdown schedules
Depreciation calculations
Supporting documentation

If your CPA has questions, we’re happy to collaborate directly.

Who Should Consider Cost Segregation for STRs?

Cost segregation is particularly beneficial if you:

Own a short-term rental purchased or renovated after 1987
Converted a long-term rental into a short-term rental
Earn high W-2 or business income
Plan to hold the property for several years
Want to reinvest tax savings into additional properties
Are scaling a short-term rental portfolio

Even single-property owners can see substantial benefits.

What Kind of Tax Savings Can You Expect?

While results vary by property, STR owners commonly see:

20%–35% of a property’s value reclassified into accelerated depreciation
Six-figure tax deductions in the first year for higher-value properties
Immediate cash flow increases
Reduced quarterly estimated tax payments

And if you’ve owned your STR for several years without cost segregation, you may be able to “catch up” depreciation without amending prior tax returns—thanks to IRS accounting method change rules.

Cost Segregation Is IRS-Approved and Time-Tested

Cost segregation has been recognized and upheld by the IRS for decades and is explicitly outlined in IRS guidance and court rulings.

The key difference between a strong study and a risky one comes down to who performs it.

At Morris Cost Seg Consultants:

We use engineering-based methodologies
Our studies are fully compliant with IRS standards
We stand behind our work
Our reports are built to withstand scrutiny

This is not an aggressive loophole—it’s a strategic application of existing tax law.

Common Misconceptions About Cost Segregation

“My property isn’t big enough.”
Many STRs qualify—even single-family homes and small multifamily properties.

“I missed my chance because I bought years ago.”
Not true. You can often claim missed depreciation in the current year without amending prior returns.

“It increases audit risk.”
A properly engineered, IRS-compliant study actually reduces risk compared to unsupported depreciation estimates.

“I’ll lose the benefit when I sell.”
While depreciation recapture exists, most owners still come out far ahead due to time-value of money and reinvestment opportunities.

WHY CLIENTS CHOOSE MORRIS COST SEG CONSULTANTS

Engineering-Based Cost Segregation. Trusted Experience. Proven Results.

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Not all cost segregation firms are created equal. Morris Cost Seg Consultants stands apart because we focus on accuracy, defensibility, and real-world results.

What Sets Us Apart:

✔ Engineering-based studies—not shortcuts
✔ Specialized experience with short-term rental properties
✔ Transparent pricing and clear ROI expectations
✔ Seamless collaboration with your CPA or tax advisor
✔ Personalized support from start to finish

We understand that short-term rental owners have unique goals—and we tailor each study to maximize value while protecting you from unnecessary risk.