From the founder

Where you invest, and the land under it, changes the math

A $2.35M luxury home in LA depreciated to $470K. A $190K backyard build depreciated in full. Where you invest changes the math.

Bola Akinsanya · Founder, Unlevered · August 17, 2026

We recently did a study for a client in Los Angeles who bought a house for about two point three five million dollars. He travels a lot for work, so about half the time he runs it as a short-term rental.

Here is where he was a little disappointed. He bought the house expecting to generate maximized deductions for at least the next two to three years. What he did not account for is that in a place like LA the land value is extremely high. You can have an amazing full luxury house worth two point three five million, and assume the asset itself is worth that much. Honestly, if you moved that house to a different location, say Georgia, most of the value would be in the house. But because he is in LA, it was not. When we went through the engineered study, the depreciable basis came to only four hundred seventy thousand dollars. The rest was land, which never depreciates.

Compare that to a client investing in an accessory dwelling unit. They were pricing out a roughly one hundred ninety thousand dollar backyard build to give their adult son, who recently moved back home, a business he could run and get on his feet, funded largely by their tax bill. On a backyard they already own, there is no new land in the project, so almost all of it is depreciable.

Put them side by side and the point is hard to miss. On the LA house you put in about twelve times the cash, but you only get about two and a half times the total write-off. On a per-dollar basis the backyard ADU is by far the smarter investment, because none of your money is buried in land that will never depreciate.

So again, really thinking about where and how you invest matters. The same dollars behave completely differently depending on how much of them go into land versus the building and everything inside it.

Land is also why the price tag alone does not tell you whether a study is worth it. Here is what a study costs and what actually moves the number, so you can weigh the fee against the basis you can really accelerate.

Reach out with questions, and bring your CPA. Our individual portal is at unlevered.io/hello.