Short-term rental owners can deduct a broad range of expenses against their rental income. Combined with the STR loophole, these deductions can offset not just rental income but your W-2 wages as well.
Here's a comprehensive checklist of every deduction category available to STR investors in 2026, organized by type.
- Operating expenses are deducted when paid.
- Depreciation is claimed over time (or accelerated with cost segregation and bonus depreciation).
- Start-up and setup costs in year one are often larger than ongoing operating expenses.
- Keep receipts and records for at least 3-7 years.
Category 1: Depreciation
Depreciation is the largest deduction for most STR investors. Unlike operating expenses, you don't actually spend this money — the IRS allows you to deduct the "wear and tear" on the property each year.
Standard residential depreciation: The building (excluding land) depreciates over 27.5 years using the straight-line method. On a $400,000 building, that's approximately $14,545 per year.
Accelerated depreciation via cost segregation: A cost segregation study reclassifies portions of the property into 5-, 7-, and 15-year categories. Combined with 100% bonus depreciation (permanently restored under the OBBBA for property placed in service after January 19, 2025), these components can be fully deducted in year one.
Personal property: Furniture, appliances, and other movable items are generally 5-7 year property and eligible for bonus depreciation.
Land improvements: Landscaping, driveways, patios, decks, fences, and outdoor amenities are 15-year property and eligible for bonus depreciation.
Note: Land itself is never depreciable. When calculating your depreciable basis, you must allocate a portion of the purchase price to land (typically 10-25% depending on market and property type).
Category 2: Mortgage Interest
Interest paid on your mortgage for the rental property is fully deductible. This includes:
- Monthly mortgage interest (from your annual lender statement)
- Mortgage insurance premiums (PMI or MIP), depending on your loan type
- Interest on a HELOC if proceeds were used for the rental property
What to keep: Annual Form 1098 from your lender, which reports total interest paid for the year.
Category 3: Property Taxes
Real estate taxes assessed on your rental property are deductible in the year paid. If you have an escrow account, deduct the amount disbursed to the tax authority, not just the amount deposited into escrow.
Category 4: Insurance
All insurance premiums directly related to your STR are deductible:
- Short-term rental property insurance (specialized STR policy or landlord policy)
- Liability insurance
- Flood insurance (if applicable)
- Umbrella policy (allocate the portion attributable to the rental)
Category 5: Cleaning and Housekeeping
Cleaning expenses are among the largest operating costs for STR owners and fully deductible:
- Cleaning fees paid to housekeepers or cleaning services
- Laundry costs (if you wash linens yourself, cost of laundry supplies)
- Deep cleaning between longer stays
- Seasonal cleaning and property resets
Category 6: Property Management and Co-Host Fees
Fees paid to manage the property are deductible:
- Property management fees (typically a percentage of revenue)
- Co-host fees
- Virtual assistant fees for STR-related tasks
- Concierge or guest services fees
Category 7: Supplies and Consumables
All supplies used in the property for guests are deductible:
- Linens, towels, and bedding
- Toiletries and personal care items
- Kitchen consumables (coffee, tea, cooking oil, cleaning supplies)
- Paper products
- Outdoor supplies (firewood, propane, pool chemicals)
- Welcome basket items
Tip: Items under $2,500 per invoice or receipt can be expensed immediately using the de minimis safe harbor election (requires annual election on your tax return). This avoids the need to capitalize and depreciate small items.
Category 8: Repairs and Maintenance
Expenses to restore the property to its existing condition are deductible when paid:
- Plumbing repairs
- HVAC servicing and repairs
- Appliance repairs
- Painting (to maintain existing condition, not improve)
- Pest control
- Landscaping maintenance (mowing, seasonal cleanup)
- Lock and key replacement
Important distinction: Repairs restore something to working condition. Improvements add value or extend useful life and must be capitalized and depreciated. A roof repair is a repair. A new roof is an improvement. When in doubt, ask your CPA.
Category 9: Utilities
If you pay utilities for the rental property, they're fully deductible:
- Electricity
- Gas
- Water and sewer
- Trash and recycling
- Internet (required for most STR guests)
- Cable or streaming services included in the rental
If utility bills are sometimes in your name for a property that also has personal use, you need to allocate the rental portion.
Category 10: Platform Fees and Booking Costs
Fees charged by booking platforms are deductible:
- Airbnb host service fee (typically 3% of bookings)
- VRBO listing fees
- Direct booking website hosting fees
- Channel manager software subscriptions
- Dynamic pricing tool subscriptions (PriceLabs, Wheelhouse, etc.)
Note: The gross amount reportable on your 1099-K from Airbnb includes platform fees charged to guests. Your deductible fee is the host-side fee, not the guest-side fee.
Category 11: Professional Services
Fees paid to professionals for your rental business:
- CPA or tax preparer fees (allocate the STR-related portion)
- Attorney fees related to the rental
- Cost segregation study fee
- Property inspection fees
- Appraisal fees (if for business purposes)
Category 12: Travel and Mileage
Travel directly related to your STR operations:
- Mileage to and from the property (using IRS standard mileage rate or actual expenses)
- Airfare and hotel for property visits (if property is in another city)
- Travel for substantial property management activities
What to keep: A mileage log with date, destination, business purpose, and miles driven. Vehicle deductions are heavily scrutinized without contemporaneous records.
Category 13: Marketing and Advertising
Costs to attract guests:
- Professional photography for the listing
- Copywriting for listing descriptions
- Paid ads on Airbnb, Google, or social platforms
- Social media costs related to the STR
- Printed materials for guests or marketing
Category 14: Education and Professional Development
Costs to improve your STR business:
- Books, courses, or subscriptions related to STR management (note: these must relate to your existing rental activity, not general investment education)
- Industry conferences (allocate appropriately)
- Subscriptions to STR market data tools
Caveat: The activity must be currently operating. Pre-acquisition educational costs are capitalized or deducted differently.
Category 15: Home Office (Limited)
If you have a dedicated home office used exclusively and regularly for your STR business (not for personal activities), you may be able to deduct home office expenses. This is more limited than many investors expect — the exclusivity requirement is strictly enforced.
Commonly Missed Deductions
- STR-specific software: Booking management, accounting software, and STR tracking apps used for the business
- Bank fees and payment processing: If you use a separate business bank account for the STR
- Security system monitoring: If the system is for the rental property's security
- Lock replacement: Smart lock upgrades or key replacement between guests
- Guest-related losses: Damage caused by guests that exceeds security deposits (deductible as a loss or repair cost)
- Professional liability insurance: Errors and omissions coverage if you provide any advisory services
- Wages paid to children: If your children perform legitimate work on your STR (see paying kids for STR work)
Ready to see if you qualify? Try the free STR loophole calculator →