Real estate depreciation lets you deduct the cost of a building over its useful life — 27.5 years for residential property. Pre-filled with Missouri median property value of $258,000.
Avg Cap Rate
7%
Median Price
$258K
Property Tax
0.85%
Vacancy Rate
8.7%
Local Factors
Annual Depreciation
$7,505
$625/mo
What does this mean?
Your annual depreciation tax savings are modest. This is common for lower-value properties or when land makes up a large portion of the purchase price.
Depreciation is one of the most powerful tax benefits of owning rental property. The IRS allows you to deduct the cost of a building (not land) over its useful life — 27.5 years for residential and 39 years for commercial property.
This is called straight-line depreciation because you take equal deductions each year. It's a "paper loss" — your property might be appreciating while you claim it's losing value. That phantom expense offsets rental income and reduces your tax bill.
Keep running the numbers
Depreciation is the silent return in Missouri. See how it compounds.
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