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Mortgage Glossary

Depreciation

Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker

Depreciation is a drop in a property's value over time or from wear. For rentals, it is also a yearly tax deduction. It is the opposite of appreciation.

What Depreciation means

Investors use it to lower the taxable income on a rental. It reflects normal wear on the building. Land itself does not depreciate.

Florida example

A Florida rental may lose value from age or wear. The owner claims depreciation on their taxes. That can reduce what they owe.

What it means

Depreciation is a drop in a property's value over time or from wear. For investors, it is also a tax deduction on rentals.

It is the opposite of appreciation.

Why it matters

Depreciation affects your home's value and, for rentals, your taxes. Investors use it to lower taxable income.

We help investors understand the numbers. Reach out and we will guide your rental strategy.

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Official resources

Verify the details for your own situation against these government and agency sources: CFPB Owning a Home guide and HUD homebuyer resources.

Related Mortgage Terms

Discount PointsDiscount points are upfront fees paid to the lender to permanently lower your mortgage interest rate, with one point costing 1% of the loan amount.Documentary Stamp TaxDocumentary stamp tax is a Florida transfer tax charged on deeds and on new mortgages when property changes hands or is financed.Down PaymentA down payment is the upfront cash you put toward a home purchase, with the rest financed by your mortgage.
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