Paying six figures in tax on your salary? There's still a way to cut it.
Your CPA says there's nothing left to deduct. A short-term rental can change that. I teach you how the strategy works, build the income and tax projection with you, and help you put it in place, from the first idea to your first tax return.
- ≈2 hrs/week of your time
- Keep your day job
- No real estate license needed
Regular rentals don't help you. Short-term rentals can.
Losses from a normal long-term rental are "passive." Once your income is over $150,000, you generally can't use them against your salary. They just carry forward.
Short-term rentals are treated differently. If the property meets two tests, its losses can be non-passive, and depreciation from a cost segregation study can offset W-2 income in the same year. You don't need real estate professional status, and you can keep your day job.
Average guest stay of 7 days or less
This keeps the property out of the "rental activity" category under the passive loss rules. Most vacation rentals meet it naturally.
You materially participate
The usual path: 100+ hours in the year and more than anyone else, including cleaners and managers. You need a log made as you go, not rebuilt in April. The GetawayROI tracker keeps that log for you.
Cost segregation makes the loss large
A study moves 20–30% of the building into short-life property. With 100% bonus depreciation now permanent, that can be deducted in year one.
Idea, projection, implementation.
Most people hear about "the STR loophole" at a dinner party and stop there. Here's how I walk you through the whole thing, in the order it has to happen.
Is this right for you?
Before looking at a single listing, we check whether the strategy fits your income, your time, and your goals.
- Your income and bracket
- Time you can realistically commit
- Self-manage, co-host, or full service
- Budget, financing, and risk tolerance
Rental income plus tax benefit
We model a specific property two ways: what it earns as a business, and what it does to your tax bill.
- Revenue and seasonality from real data
- Operating costs and cash flow
- Estimated cost seg reclassification
- Year-one tax savings, reviewed with your CPA
Buy it, run it, document it
The tax benefit only holds up if everything is set up correctly from day one.
- Purchase, as your licensed agent
- Setup, launch, and management plan
- Cost segregation study ordered
- Hours logged all year in the GetawayROI tracker, with a CPA-ready report at filing
Your year-one projection.
Change the inputs to match a property you're considering. This is the same two-sided view we build together on a call, in simplified form.
Operating costs cover management, cleaning, utilities, insurance, property tax, supplies, and repairs as a share of revenue.
Simplified estimate. Assumes both STR tests are met, a 30-year loan, closing costs of 3%, and furnishings expensed in year one. Ignores state tax, the mid-month convention, study fees, the excess business loss cap, and depreciation recapture when you sell. Not tax advice. Confirm with your CPA before you buy.
Where the big deduction comes from.
Without a study, a rental building is written off evenly over 39 years (land can't be depreciated at all). A cost segregation study is an engineering report that breaks the purchase into parts. Many of those parts have 5, 7, or 15-year lives.
100% bonus depreciation is now permanent for property acquired after January 19, 2025, so those shorter-life parts can usually be deducted in the first year the rental is in service.
The timing matters. A study is most useful in the year you buy and place the property in service, and it's worth planning before you close.
15-yr Pool
15-yr Pool deck
5-yr Outdoor furniture
39-yr Building
I'm Nicholas Thiel. I work on every side of this strategy.
Most advisors only see one piece: the agent sees the purchase, the manager sees operations, and the CPA sees the return. My day-to-day work covers all three, which is why I can take you from idea to implementation.
I work with owners and investors at a short-term rental management company on Florida's east coast. I bring them on as clients, set up their properties, and look at real revenue and cost data every day. My projections are based on how rentals actually perform.
I built GetawayROI to solve the hardest part of the strategy: proving material participation. The app tracks an owner's hours all year and produces a dated report for their CPA at filing time.
GetawayROI on the App Store ↗When it's time to buy, I can represent you. I look at every listing as a short-term rental investment: local rules, revenue potential, and how it will depreciate.
Before you get on a call.
Do I need to be a real estate professional?
No. Real estate professional status is a different, much harder test that most full-time W-2 employees can't meet. The short-term rental approach relies on the 7-day average stay and material participation instead.
Can I use a property manager?
Yes, but it's harder to meet material participation if a full-service manager puts in more hours than you. Many investors self-manage or co-host in year one, then change the setup later. Either way, the GetawayROI tracker records your hours as you work, so you can show you've put in more time than anyone else. We'll plan this before you buy.
What if I buy late in the year?
You need the property in service and your participation met within that tax year. Buying in November can leave very little time, so we plan backward from December 31.
Is this a way to avoid taxes forever?
No. It's mostly a timing benefit. Depreciation lowers your tax now, and some of it can be recaptured when you sell. The value is in having that money working for you today, and your CPA should plan the exit with you.
Do you replace my CPA?
No. I teach the strategy, build the projection, and handle the property side. Your CPA confirms how it applies to your return and files it. I'm happy to work with the CPA you already have.
Let's see if the numbers work for you.
30 minutes. We'll look at your income, your goals, and whether a short-term rental makes sense before you spend anything.
- Your rough W-2 income and filing status
- How much you'd like to invest
- How much time you can put in