Cost Segregation for Vacation Rentals: What Property Owners Should Know in 2026 Owning a vacation rental is not only an investment in real estate. It is also an operating business with furnishings, appliances, outdoor improvements and building components that may have different tax lives. Normally, the residential portion of a rental property is depreciated over 27.5 years. A cost-segregation study takes a closer look at the property and identifies components that may qualify for shorter depreciation periods—often five, seven or 15 years. For some vacation-rental owners, this can produce significantly