Property type guide

Cost segregation for short-term rental (STR) portfolios

A short-term rental is a furnished, turnkey property — and the furnishings are the point. Every STR ships with beds, sofas, a full kitchen of small appliances, electronics, decor and window treatments, plus the outdoor amenities guests book for. That furnished layer gives STRs an unusually high 5-year share compared with a long-term rental of the same building.

At a glance
Modeled reclass range	20–35%
Typical study fee (Cost Seg Smart)	See pricing guide
Recovery periods captured	5-, 7- and 15-year vs the 39-year shell
Delivery	Engineering-based; virtual or on-site depending on the provider

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Contents

What gets reclassified
Typical results and what drives the spread
By the numbers (original data)
What a study costs for this type
Provider comparison — Top 5
Is it worth it — break-even
Frequently asked questions

1What reclassifies in a short-term rental (STR) portfolios

Cost segregation moves qualifying components out of the 39-year building shell into shorter recovery periods. In a short-term rental portfolio the recurring short-life components are:

Short-term rental portfolio — commonly reclassified components
Component	Recovery period	Authority carried (with caveat)
Furniture (beds, sofas, tables, seating, outdoor furniture)	5-year	Personal property (Asset Class 57.0) — freestanding furnishings that make the property rentable; loose and removable, not part of the structure.
Appliances & electronics (kitchen packages, TVs, small appliances)	5-year	Personal property that is unit-serving and removable; a built-in appliance permanently integrated into the structure may follow the building.
Decor, window treatments & removable soft goods	5-year	Personal property when decorative and removable; permanently affixed treatments and general finishes generally remain in the shell.
Outdoor amenities — pool, hot tub, deck, fire pit	5- or 15-year	A freestanding hot tub is generally 5-year personal property; an in-ground pool, decking and hardscape are 15-year land improvements; the split turns on what is affixed.
Removable floor coverings & accent lighting	5-year	Personal property when tacked/glued-down or decorative; permanent flooring and general illumination stay part of the residential shell.
Landscaping, irrigation & site improvements	15-year	Land improvements (Asset Class 00.3) serving the developed site; raw land value is non-depreciable.

The one thing to know about short-term rentals: The defining feature of an STR study is the furnished-rental FF&E. Because a short-term rental is delivered move-in ready, its 5-year personal-property share runs far above what a long-term lease of the same house would show — furniture, appliances, electronics and decor are all part of the rentable package. The one operational caution: what conveys with the property varies deal to deal, so a defensible study confirms per-property which furnishings were actually acquired and included rather than assuming a standard package.

2Typical results and what drives the spread

Across standardized short-term rental portfolio configurations, the engine models an accelerated share of roughly 20–35%. How heavily furnished the property is, and whether outdoor amenities like a pool or hot tub are present, drive the spread. These are modeled ranges, not a promise for any specific building — see by the numbers.

3By the numbers (original data)

The accelerated-% range on this page is an internal model range: generated by running Cost Seg Smart's commercial component engine across standardized short-term rental portfolio configurations. It is not a summary of completed client studies, and it is not a prediction for your building. Actual results depend on the property's facts, documentation and your CPA's positions.

4What a study costs for this type

Study fees track building size, documentation quality and whether an on-site inspection is performed. See the pricing guide for current market bands; competitor fees are sourced there, not quoted in prose here.

5Provider comparison — the Top 5 for this asset class

Every provider below is scored on the same fixed rubric, weighting relevant short-term rental portfolio evidence most heavily. Facts are drawn from each provider's public materials and dated.

Provider

Score*

Relevant short-term rental portfolio evidence

Profile

RE Cost Seg

Engineering-first · National (Houston, TX)

Best published pricing
Best for virtual delivery
Most transparent turnaround

7.9

How this score is built (sub-score ÷ 5 × weight):

Methodology & technical documentation	3.8/5	24%	18.2
Relevant property-type evidence	3.0/5	30%	18.0
Deliverables	4.0/5	14%	11.2
Pricing transparency	5.0/5	10%	10.0
Delivery options	5.0/5	7%	7.0
Audit-support terms	5.0/5	8%	8.0
Turnaround transparency	5.0/5	7%	7.0
Total		100%	79.0 → 7.9

Generic coverage only

source · as of Jul 2026

Profile →

Cost Seg Smart site owner

Engineering-first

Best published pricing
Best for virtual delivery

7.8

How this score is built (sub-score ÷ 5 × weight):

Methodology & technical documentation	4.2/5	24%	20.2
Relevant property-type evidence	3.0/5	30%	18.0
Deliverables	5.0/5	14%	14.0
Pricing transparency	5.0/5	10%	10.0
Delivery options	4.0/5	7%	5.6
Audit-support terms	3.0/5	8%	4.8
Turnaround transparency	4.0/5	7%	5.6
Total		100%	78.0 → 7.8

Generic coverage only

source · as of Jul 2026

Profile →

Baker Tilly

National accounting/advisory · National (Chicago, IL)

Best for national on-site coverage
Most transparent turnaround

7.6

How this score is built (sub-score ÷ 5 × weight):

Methodology & technical documentation	4.2/5	24%	20.2
Relevant property-type evidence	3.0/5	30%	18.0
Deliverables	5.0/5	14%	14.0
Pricing transparency	3.0/5	10%	6.0
Delivery options	3.0/5	7%	4.2
Audit-support terms	4.0/5	8%	6.4
Turnaround transparency	5.0/5	7%	7.0
Total		100%	76.0 → 7.6

Generic coverage only

source · as of Jul 2026

Profile →

Source Advisors

Engineering-first · National (Fort Worth, TX)

Best for national on-site coverage

7.3

How this score is built (sub-score ÷ 5 × weight):

Methodology & technical documentation	5.0/5	24%	24.0
Relevant property-type evidence	3.0/5	30%	18.0
Deliverables	5.0/5	14%	14.0
Pricing transparency	2.0/5	10%	4.0
Delivery options	3.0/5	7%	4.2
Audit-support terms	4.0/5	8%	6.4
Turnaround transparency	2.0/5	7%	2.8
Total		100%	73.0 → 7.3

Generic coverage only

source · as of Jul 2026

Profile →

Cherry Bekaert

Engineering-first · National (Richmond, VA; #1 Southeast)

Best for national on-site coverage

7.2

How this score is built (sub-score ÷ 5 × weight):

Methodology & technical documentation	4.6/5	24%	22.1
Relevant property-type evidence	3.0/5	30%	18.0
Deliverables	4.3/5	14%	12.0
Pricing transparency	3.0/5	10%	6.0
Delivery options	3.5/5	7%	4.9
Audit-support terms	4.0/5	8%	6.4
Turnaround transparency	2.0/5	7%	2.8
Total		100%	72.0 → 7.2

Generic coverage only

source · as of Jul 2026

Profile →

Top 5 of 22 firms scored for short-term rental portfolio. See every firm's full profile and per-type standing in the provider directory.

*Score is this site's published rubric output (0–10) for short-term rental portfolio, weighting relevant property-type evidence most heavily (see how we compare) — click any score for its build-up. It is not a customer rating and no reviews are used. Cost Seg Smart is the site owner and is scored on the same rubric.

6Is it worth it — break-even

Because furnished-rental FF&E stacks on top of the usual finishes and site work, a modeled 20–35% reclassification of depreciable basis is typical for short-term rentals, and the benefit generally clears a study fee at a modest basis — accelerated further where bonus depreciation applies to the large 5-year pool.

7Frequently asked questions

Why do STRs reclassify more than long-term rentals?

Because they are sold and operated furnished. A long-term lease of the same house transfers an empty shell; an STR includes furniture, a full kitchen, electronics and decor — all 5-year personal property. That furnished layer lifts the reclassifiable share well above a comparable long-term rental.

Do I need to know which furnishings actually came with the property?

Yes. What conveys varies from deal to deal, so the study confirms per-property which furniture, appliances and equipment were acquired and included, rather than assuming a standard package. Only property actually in your basis can be reclassified.

Is the building still on a 27.5-year life?

Yes. A short-term rental dwelling is residential rental property, so the shell recovers over 27.5 years. Cost segregation moves the furnishings, appliances and site work into 5- and 15-year classes; the structure itself stays at 27.5.

How is a hot tub versus an in-ground pool treated?

Differently. A freestanding, movable hot tub is generally 5-year personal property, while an in-ground pool with its decking and hardscape is generally a 15-year land improvement. The distinction is whether the amenity is affixed to the site.

Does the way I use the STR affect the classification?

No. Cost segregation classifies assets by their nature and use as property, not by how the owner participates or the tax treatment of the rental activity. The furniture, appliances and site work are classified the same way regardless; how you use the resulting deductions is a separate question for your CPA.

Sources and authority consulted

Rev. Proc. 87-56 (MACRS asset classes)
IRS Cost Segregation Audit Techniques Guide (Pub 5653)
Cost Seg Smart per-vertical component engine (modeled ranges + component authorities).

Cost Seg Smart, which operates this guide, publishes commercial studies and fees at costsegsmart.com and details its methodology and sample reports at commercialcostseg.com.