Most short-term rental owners depreciate the building and stop there. The furniture, the appliances, the hot tub out back quietly gets folded into the 27.5-year building basis, or worse, never makes it onto a depreciation schedule at all. That is the single most common way STR depreciation gets under-claimed: not by missing the exotic components inside the walls, but by forgetting the obvious things sitting in plain sight. A short-term rental carries far more short-life personal property than a long-term rental does, and almost none of it belongs on a 27.5-year clock. Here are the five categories owners miss most — and what they add up to.
What makes an asset “short-life”?
Residential real estate depreciates over 27.5 years. But the IRS has long recognized that the things inside and around a building wear out faster than the structure itself. Tangible personal property — anything not permanently part of the building — generally depreciates over five or seven years. Land improvements depreciate over fifteen. Both buckets are eligible for bonus depreciation, and with 100% bonus depreciation restored for property acquired after January 19, 2025, anything that lands in those buckets is fully deductible in the year you place it in service. Identifying it correctly and documenting the values is exactly what a cost segregation study does.
1. Furniture and furnishings — and they are five-year property.
Beds, sofas, dining sets, nightstands, the bunk beds in the kids' room, the patio set on the deck. In a furnished STR this is a real number — a whole-home furnishing package routinely runs $20,000 to $30,000 — and every dollar of it is five-year property, not part of the 27.5-year building. Owners who furnished the place themselves usually have the receipts; owners who bought a turnkey, already-furnished rental can allocate a portion of the purchase price to the contents. Either way, it comes off the long clock.
2. Appliances are not part of the house.
The refrigerator, the range, the dishwasher, the microwave, the washer and dryer — appliances are five-year property, full stop. A full STR kitchen plus laundry is commonly $7,000 to $10,000 of equipment that has no business sitting on a 27.5-year schedule. This is the category that do-it-yourself depreciation schedules miss most often, because a kitchen feels like part of the building. The appliances in it are not.
3. Window treatments, rugs, lighting, and decor add up.
Blinds, curtains, area rugs, removable light fixtures, wall art, the styled shelf of coffee-table books. Design-forward STRs spend real money here, and it is all five-year personal property. Individually these feel too small to bother with. Collectively, a well-styled three-bedroom can easily carry $6,000 to $8,000 of it, and it belongs in the five-year bucket with everything else.
4. Technology and security gear is all short-life.
Smart locks, the wifi mesh system, the doorbell cameras, the smart thermostat, the living-room TV and the bedroom TVs, the noise monitor, the streaming hardware. Modern STR operations run on this stuff, and it is all five-year property. It also turns over fast, which makes getting it onto the right schedule matter even more.
5. The hot tub, deck, and fire pit are land improvements.
Step outside. The hot tub, the deck or paver patio, the fire pit, the fence, the landscaping, and the gravel parking pad are land improvements — fifteen-year property, also eligible for bonus depreciation. For an amenity-driven STR this is frequently the largest single bucket on the list. A hot tub and a built-out outdoor space can run $25,000 to $35,000, and on a 27.5-year schedule it is barely moving.
What the five add up to: a worked example.
Take a furnished STR cabin acquired in 2026 for $615,000. Set the building itself aside for a moment and just inventory the five categories above: $24,000 of furniture and furnishings, $8,500 of appliances, $7,000 of window treatments and decor, and $4,500 of technology — that is $44,000 of five-year property — plus $30,000 of outdoor land improvements. That is $74,000 of short-life property that an owner depreciating only the building would have left on the 27.5-year clock, or never claimed at all.
With 100% bonus depreciation in effect, that entire $74,000 is deductible in the year the property is placed in service. At a 35% marginal federal rate, that is roughly $25,900 of year-one tax savings — before a study even touches the building's own short-life components, the specialty electrical and plumbing and finishes that a full cost segregation study reclassifies on top of this. Against a flat $1,750 study fee, the furnishings and land improvements alone pay for the work many times over.
Why owners leave it on the table.
Two reasons. First, the contents do not feel like “depreciation” — they feel like a shopping list — so they never make it onto the schedule. Second, even when they do, they get lumped into the building basis at 27.5 years because nobody broke them out by recovery period. A cost segregation study fixes both: it inventories the personal property and land improvements, assigns defensible values and the correct recovery periods, and documents the basis so the breakout is audit-ready. At Refined, every study is signed off by an Enrolled Agent (EA) — federally licensed to practice before the IRS — so the numbers are ones you can stand behind if the return is ever examined.
One more thing for high earners.
If you materially participate in the rental and your average guest stay is seven days or fewer, the losses these deductions create may offset W-2 and other active income, not just passive rental income — the so-called short-term rental treatment. It carries its own documentation requirements, and it is worth understanding before you count on it; I walk through the mechanics in the short-term rental loophole, explained without the YouTube fluff. If you would rather just get a quick read on the dollar range for your own property, the savings estimator on the homepage will put you in the ballpark.