What Is Rental Property Depreciation? 7 Things to Know

Rental property depreciation is the process of spreading the costs of purchasing and improving an investment property over the course of its useful life. Residential real estate's useful life is 27.5 years, and for commercial real estate, it's 39 years.

Certain conditions must be met before an investor can claim depreciation on a piece of rental real estate.

• The investor must own the property.
• The investor must use the property for income-producing activity.
• The property must have a determinable useful life.
• The property must have a useful life that exceeds one year.

Now, let's put this information to work and review a few things investors should know when claiming depreciation on rental property.

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