To Cost Seg or Not... That is the question....

[Courtney Hamilton]

I’m looking at a cost segregation study for a single-family short-term rental (5 bedrooms, hot tub, sauna, recently renovated). Before I get started, I’d love some feedback from those who’ve actually done this on a single STR.

Questions:

• What did you pay for the study (rough range is fine)?
• Who did you use, and would you use them again?
• Did it meaningfully move the needle on your taxes?
• Did you do a self-assessment / engineer-assisted model, or pay for a full engineering study?
• Any red flags, or must-haves in the scope or deliverables?
• Do you regret it (especially if you sold w/I 5 years)?

Trying to balance audit-defensibility with not lighting money on fire. Appreciate any lessons learned.

[Sean Graham]

Hi @Courtney Hamilton, owner of Maven Cost Segregation here, for STRs with heavy renovations and amenities like these, cost segregation usually moves the needle, but only if the depreciation is sized correctly and audit-defensible. A quick and free estimate upfront usually makes it obvious whether a full study is worth paying for. 
To answer your questions: here’s what I’ve seen consistently on STRs like this:

• Cost of the study: For a single-family STR, most solid engineering-based studies land somewhere in the mid-four figures, depending on size, location, and complexity. The key isn't price, it's whether the depreciation materially offsets the cost.

• Who to use: Firms that do full engineering studies with site visits and proper documentation tend to be the most defensible. The cheapest option is rarely the one people use again.

• Did it move the needle: When the STR is placed in service correctly, and depreciation is accelerated early, it often meaningfully improves after-tax cash flow, especially for higher earners or active STR owners.

• Model type: For STRs, a full engineering study is usually the safest route if you care about audit defensibility. Desktop or self-assessment models can work in limited cases but tend to leave benefits on the table.

• Red flags / must-haves: Red flags are no site visit, vague asset breakdowns, or no audit support language. You want clear classifications, tied-back costs, and proper documentation.

• Regret selling within 5 years: Regret usually comes from not modeling the exit. When depreciation, recapture, and timing are understood upfront, most investors are glad they did it, even with a shorter hold.

That’s why I usually recommend starting with a free estimate of benefits first, as it quickly shows whether the benefits justify a full study before you commit.
Hope that helps!