All Forum Posts by: AJ Wong

With the STR Loophole back in the mix, I've been having A LOT more casual conversations (from the gym to the dinner table) about accelerated depreciation! Especially for first time investors - I thought for many (including myself) it could be helpful to start at the very beginning..Depreciation is a paper loss that can offset real income. But not all properties are created equal when it comes to depreciation and often times especially with first time investors So, what exactly makes a property more depreciable? 

Low Land-to-Improvement Ratio = More to Depreciate

Only the improvements on a property are depreciable — not the land. That means the lower the land value relative to the building and its components, the better.

Example:

• Property A: $500K total price

• $100K land / $400K improvements → $400K depreciable

• Property B: $500K total

• $300K land / $200K improvements → Only $200K depreciable

Tip: Look for areas or property types where the improvement value is high relative to land — especially helpful in suburban or rural markets.

Short-Term Rentals Open the Door to Bonus Depreciation

If your property qualifies as a short-term rental (STR) and you materially participate, you're not bound by the traditional 27.5-year depreciation schedule. Instead, you can unlock 100% bonus depreciation on assets with a useful life under 20 years.

This includes:

• Furniture & appliances • Flooring • Window coverings • Landscaping & outdoor lighting • Fencing, driveways, and patios

These can often make up 20–35% of the purchase price — all potentially depreciated in Year 1 with a cost segregation study.

Cost Segregation Friendly Features = Faster Write-Offs

Certain property features allow you to break down the building into faster-depreciating components:

Look for:

• High-end finishes (luxury fixtures, lighting, smart tech) • Pools, patios, outdoor kitchens

• Detached garages, ADUs • Upgraded appliances and built-ins

The more non-structural components a property has, the more value a cost segregation study can carve out into 5-, 7-, and 15-year buckets.

Newer or Recently Renovated Homes = Richer Depreciation

New builds or heavily renovated homes often pack in:

• New HVAC systems • High-efficiency appliances • Premium flooring, tile, and cabinetry

Not only are these attractive to guests — they’re also gold for depreciation, since they’re assigned shorter useful lives and can be depreciated more quickly.

Higher Purchase Price = Bigger Deductions

It sounds obvious, but worth repeating: the more expensive the property, the more there is to depreciate.

A $1M STR might yield $200K–$300K+ in bonus depreciation in Year 1. For high earners, that can offset a significant chunk of W-2 or 1099 income.

What Hurts Depreciation Potential?

Not all properties offer the same tax advantages. Here’s what might limit your write-offs:

• High land value • Older homes with little depreciable value left • Raw land or Acreage • Properties with minimal improvements or personal property

As more investors become aware of the renewed bonus depreciation for 2025, 2026 & 2027 I expect the volume and interest for prime STR investment properties to continue to intensify. Hopefully this gives a little insight that supports the search :)

Yahoo News analyzed NOAA climate data from 2022 to 2024 to determine how many "nice weather" days each U.S. county experienced. A "nice day" was defined as one with a high temperature between 60°F and 85°F and less than 1 mm of rainfall.

Unsurprisingly, California & Florida dominate the top places on the list but some unexpected or unfamiliar regions make the top 30:

- Brunswick County NC

- Glynn & Mcintosh County GA

- Horry County SC

- Coos County OR

- Franklin County FL

- Williamsburg County SC

I was curious where some of the Oregon Coast placed:

Where does your county land? Link to tool here and article. 

If you think real estate trends are all about mortgage rates and migration stats — take a step back and look at the next 20–30 years:

Where will people still want to live as the climate shifts?

“Climate refuge” cities and regions are about to become one of the biggest long-game angles in real estate — and smart investors are quietly looking beyond today’s hot markets for tomorrow’s livable, affordable, and resilient sweet spots.

Politics and ‘beliefs’ aside - there are plenty of recent real estate investors that can tell you of the reality of increasing weather risk or loss and the costs associated with operating or owning in what are increasingly higher risk areas.

For example: My father owns a sub $500K home in St Lucie County Florida - a region that I'm from and would love to get back to investing in one day…but his insurance premium is nearing $6K annually and if we extrapolate the rate of insurance increase over the duration of a conventional 30 year mortgage - my money is on some areas becoming un-investable. As an example here in Oregon - the riverfront cottage we're currently in contract in has an annual home owner's insurance premium of $1150+/- I could've never imagined many of the natural disasters and inconveniences that have occurred since I left LA for the southern Oregon Coast in late 2018; global pandemic, 2020 wildfires, multiple heatwaves, LA wildfires and the flood disasters in many prime STR areas - that have in a converse and perverse way been validation of Oregon Coastal investment timing and strategy.

A few years ago Yahoo did an in depth study of areas that would be most 'positively' or 'negatively' impacted by climate risk by region - the #1 county in terms of 'positive' climate change risk in the PNW was Curry County Oregon - where my first and latest investment properties are located.

What Makes a Good Climate Haven?

When I vet a future-proof market, I’m watching for:

• Improving habitability: Milder summers, cooler nights, stable air quality, lower flood and fire risk.
• Water security: Access to groundwater, rivers, or steady rainfall.
• Lower wildfire exposure: Coastal edges or greener corridors where burn risk is historically lower.
• Existing migration momentum: People already relocating from higher-risk zones like the Southwest or parts of Northern California.
• Cost of living: Still affordable enough that buyers, retirees, and remote workers aren’t priced out.
• Business/food pivots: Watch vineyards, growers, and small ag operations — many are migrating north for better growing conditions.

Coastal Edges Are Back in Play

One of the most interesting shifts? Well-situated coastal towns not hammered by hurricanes, extreme floods, or sea-level squeeze.

Example:

• The Oregon Coast is seeing quiet migration from Northern California and the inland West. Wildfire risk drops sharply west of the coastal range.
• Plenty of rainfall + natural aquifers = stronger water supply than drought-prone zones.
• New micro-industries popping up: boutique vineyards moving north, creative remote work communities, regenerative ag, eco-tourism.

Cost of Entry vs Future Demand

Some “climate refuge” cities are already pricing in the trend — look at Burlington, VT or coastal Maine. But many coastal micro-markets are still affordable enough that you’re not competing with big hedge funds yet:

• Ocean-view homes still under $1M
• Reasonable short-term rental rules in small towns
• Off-season bookings from storm watchers, anglers, and remote workers who don’t want 110°F summers

Real Example: Vineyards on the Move

One of my favorite signals? Wineries.
Parts of Northern California wine country are quietly buying Oregon Coast foothills land — cooler summers, plenty of water, longer growing seasons as inland temps spike.

If grapes and growers pivot north for habitability, so do lifestyle buyers, tourists, and long-term demand for premium homes.

If you’re only watching short-term migration trends, you’re missing the real story:

Where will people still thrive when it’s hotter, drier, or burn-prone somewhere else?

A "boring" coastal STR or second home in the right climate corridor can turn into a legacy property — cash flowing now, appreciating steadily, and staying livable while other regions scramble for water or shade.

Curious what others see as future climate havens? Drop your picks below — or keep ‘em cryptic if you must.

Who’s quietly buying for 2040, not just 2025? 

 Ditto. I made the 'mistake' of selling several prime properties over the years for what amounted to short term gains. Slow and steady wins the race! 

 Thanks Mike!! 

Everyone loves to break down STR cash flow, tax loopholes, and regulation nightmares (been there). But one piece that's way under-discussed is the quiet wealth you build just by letting your guests pay your mortgage for you — and how that stacks up with long-term coastal appreciation.

We're in contract on a riverfront cottage here on the Oregon Coast with the game plan to allocate all profit and excess revenue towards principal. If rates drop we're anticipating reducing the amortization to 15-20 years and intend to pay off the mortgage completely (early) and by 'retirement' age..free and clear - that's when the income will actually have a meaningful impact anyhow or we re-leverage to redevelop or sell to upgrade and/or re-invest.

The Wealth Engine Nobody Sees

When you run a short-term rental with a standard 30-year mortgage, every booking chips away at your loan principal. Early on, most of that payment is interest — but you’re still building equity every single month. Over time, that payoff snowballs.

Example:

• $700K loan at 7% interest, 30-year fixed
• Year 1: ~18% of each payment goes to principal
• Year 10: ~35%
• Year 20: ~60%

I like to call that forced savings guests pay for - it’s not sexy, but it quietly builds your net worth year after year.

Small Extra Payments = Huge Impact

A lot of people just pay the minimum mortgage and focus on cash flow. But an extra $200–$500 a month toward principal can slash your payoff timeline and total interest.

Example:

• Same $700K loan
• Toss in $500/month extra → loan paid off ~5 years sooner
• That’s tens of thousands in interest savings — or money you can roll into your next deal.

When Rates Drop, It Gets Even Better

Rates are high now. They won't stay high forever. If/when rates drop, STR owners have a triple win:

• Refi to lower payments → boost cash flow.
• Keep paying the same → pay it off faster.
• Cash-out refi → tap tax-free equity for your next coastal buy.

Same property, same guests — but you just unlocked another wealth lever while everyone else complains about rates.

Layer on Coastal Appreciation

Principal paydown is only half the play. The Oregon Coast (and similar under-the-radar coastal markets) have decades of tight supply, slow development, and steady demand.

Quick context:

• Oregon’s strict land use = very little new oceanfront supply.
• Small coastal towns cap STR permits — fewer competitors, steady demand.
• Historical average coastal appreciation: 4–6% per year, with some towns outperforming due to luxury golf, hidden beaches, and second-home momentum.

Second Homes + Climate Momentum

One thing I love about the Oregon Coast: buyers see it as legacy. Improving climate, no hurricanes, low wild fire risk and a place families return to year after year. That pushes long-term resale values and second-home demand. 

Takeaway

Everyone talks cash flow, but don’t forget what happens while you sleep!
- Guests pay your principal.
- You can speed it up with tiny extra payments.
- You refi when rates drop.
- Coastal appreciation stacks on top.

This is how an STR quietly turns into a paid-off, $1–$1.5M coastal asset you own outright — while paying you to hold it.

So yeah..guests cover your loan, the coast covers your equity, and you enjoy a beach house your grandkids will brag about. 

Who else is playing the long game? 

 Thanks Syed!! 

If you’re an out-of-state investor eyeing short-term rentals, you know the usual suspects — are often oversaturated, overregulated, or both. But savvy buyers have a quieter target: the Oregon Coast.

This stretch of rugged coastline hits the sweet spot: tight supply, strong year-round demand, realistic price points, stable insurance, and powerful tax advantages. Here’s why more out-of-state buyers are locking up Oregon beach homes..

Coastal Access, Fewer Coastal Headaches

Oregon’s coastline is protected by strict land use rules — so supply stays limited and legal STRs hold value.

No hurricane season spikes your insurance (although Tsunami zones are real) and no sudden city council bans wipe out your cash flow overnight like in some big cities.

Lower Buy-In, Better Cash Flow

A California beach STR might run you $2–$3M. In Oregon? Ocean-view or beachfront homes still close in the $500K–$1.5M range — often fully licensed and zoned for legal short-term rental use.

That means lower down payments, better cash-on-cash returns, and incentivizing investments - if you run it well.

Year-Round Bookings

The Oregon Coast is the ultimate drive-to escape for Portland, Seattle, and Northern California. Families, remote workers, golfers, fisherman — they fill the calendar beyond just summer. Hot spots like Bandon Dunes pull premium guests all year long.

Tax Advantages: STR Loophole + 1031 Exchange

The STR loophole is back for 2025 — pair that with 100% bonus depreciation and you can offset big chunks of W-2 income when you buy right. Add Oregon’s 1031-friendly market and investors recognize what makes investing here so desirable. 

Manage Remotely — Or Tap a Local Pro

Many out-of-state owners manage Oregon STRs with smart tech and local cleaning crews. Want to stay hands-on to qualify for the loophole? You can — or plug in a licensed manager and scale up. We regularly refer clients to iTrip, Wander (when applicable) and Vacasa (case by case). 

Where to Look

Top towns for out-of-state STR buyers:

• Seaside — Portland’s easy beach escape, repeat guests, tight permit caps
• Florence — Low entry cost, recreational hub, Eugene’s coast gateway
• Pacific City — Solid year-round demand, multiple zones
• Rockaway Beach — Budget-friendly, family-friendly
• Bandon — Golf capital + rugged luxury coastal stays
• Brookings — Tight permits, strong ROI, southern sunshine
• Bonus picks: Bay City, Manzanita (short waitlist), Tillamook County, Mapleton, Lincoln City

Bottom Line

For out-of-state investors, Oregon’s Coast might check every box: legal zoning, strong bookings, stable insurance, tax advantages, and real long-term upside — without the drama you’ll find in the big-name beach markets.

Well..it is official - the so called ‘Big Beautiful Bill Act’ has cleared both the Senate and House and will have significant impacts on the real estate market and investors. The final version of the bill includes some major wins for real estate investors including:

• A permanent extension of lower individual tax rates
• An enhanced and permanent qualified business income deduction (Section 199A)
• A temporary (five-year) quadrupling of the state and local tax (SALT) deduction cap, beginning for 2025
• Protection for business SALT deductions and 1031 like-kind exchanges
• A permanent extension of the mortgage interest deduction

⚡️ What’s else is Back? The STR Loophole + 100% Bonus Depreciation means:

• If you buy a qualifying STR and materially participate, you can immediately write off a huge portion of the property’s cost in Year 1.
• These losses offset your W-2 income, unlike regular passive rental losses for qualified properties placed into service as of January 19th 2025.

🧮 Key Takeaway

- Without the loophole, you’d only offset passive income.
- With the loophole + 100% bonus depreciation, you offset active high W-2 income — slashing your tax bill in Year 1.

📌 Big Picture

• Who wins? High earners, self-managing STRs, 7 days or less average stays.
• Why act now? The 100% rate phases down after 2028 — lock in full write-offs while it lasts.
• Pro move: Pair with a legit cost seg study to maximize short-life asset reallocation.

Not a tax Pro - any further insight or examples are always welcome and appreciated. 

Happy to say we coincidentally entered contract on a riverfront cabin today :) 

Cheers. 

Single family agent listings (excluding FSBO, foreclosures and auctions) from South to North:

Brookings: 87 Listings | 10 Pending

Gold Beach: 82 Listings | 16 Pending

Port Orford: 24 Listings | 1 Pending

Bandon: 78 Listings | 13 Pending

Coos Bay: 123 Listings | 44 Pending

Lakeside: 24 Listings  | 10 Pending

Florence: 88 Listings | 22 Pending

Yachats: 32 Listings | 3 Pending

Lincoln City: 195 Listings | 28 Pending

Neskowin: 56 Listings | 5 Pending

Pacific City: 42 Listings | 5 Pending

Rockaway Beach: 55 Listings | 3 Pending

Manzanita: 31 Listings | 4 Pending

Cannon Beach: 27 Listings | 1 Pending

Seaside: 55 Listings | 14 Pending