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November 21.2025

2 Minutes Read

Why the STR Depreciation Loophole Will Ignite Housing Markets in 2026

STR Depreciation Loophole: Sold home with 'For Sale' sign.

Exploring the STR Depreciation Loophole: A Game Changer for Investors

The landscape of real estate investment is poised for transformation, particularly within the realm of short-term rentals (STRs). The recent enactment of the One Big Beautiful Bill Act has introduced sweeping tax changes, allowing real estate investors to write off 100% of the purchase price of certain assets, effectively shifting how depreciation impacts profitability.

At the heart of these changes is the STR loophole, an essential provision for STR owners. By allowing depreciation losses to count as active losses, investors can offset their ordinary income, offering a unique financial advantage. This provision is especially beneficial for high-income earners, who typically have limited avenues for tax deductions.

Identifying Lucrative STR Markets in 2026 and Beyond

With the boom in STRs anticipated for 2026 and 2027, savvy investors should focus on coastal markets known for consistent travel demand. Destinations in the Pacific Northwest, Florida, and the Carolinas are prepped for investment potential. Additionally, areas catering to luxury lifestyles, like mountain resorts and second-home markets, are expected to see increased activity. By understanding these market dynamics, investors can better position themselves for success.

Keys to Capitalizing on the STR Boom

No strategic advantage comes without preparation. Investors aiming to leverage the STR loophole should initiate their tax planning well ahead of property acquisitions. Engaging in cost segregation planning early can maximize depreciable value. Moreover, thoroughly verifying a property’s STR eligibility and expected participation are critical to ensure compliance with municipal regulations.

Your Next Steps as an Investor

As we approach this anticipated period of growth in the STR segment, taking proactive steps can improve investment outcomes. Working with specialized brokers and tax professionals knowledgeable about STR regulations will not only streamline the process but also uncover opportunities that may have otherwise been overlooked.

Conclusion: The STR Loophole as a Pathway to Success

In conclusion, the STR depreciation loophole presents real estate investors with a remarkable opportunity. As the market evolves, staying informed will be key to making smart decisions that maximize returns. For those looking to expand their investment portfolio, now is the time to learn more about effective strategies—take action today.

Real Estate

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Why the STR Depreciation Loophole Will Ignite Housing Markets in 2026

Exploring the STR Depreciation Loophole: A Game Changer for Investors

Identifying Lucrative STR Markets in 2026 and Beyond

Keys to Capitalizing on the STR Boom

Your Next Steps as an Investor

Conclusion: The STR Loophole as a Pathway to Success

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