The Truth About Buying a Short-Term Rental for Tax Benefits with Joey Linn

With bonus depreciation and short-term rental tax savings driving more investors into unfamiliar markets, this episode of the Tax Smart REI Podcast features Joey Linn, an NBA reporter turned first-time real estate investor, walking through what actually happened when he put the strategy into practice.

Why the Midwest, Not California

Joey covers the LA Clippers and only got into real estate after his sports media business had a strong year, leaving him with a tax bill for the first time. Rather than buying near his home in Southern California, he bought a four-unit short-term rental in Michigan City, Indiana. The reasoning was simple: the land-to-building ratio in the Midwest skewed more toward the building, meaning more value to depreciate, and his down payment went further there than it would have in LA.

He Never Saw the Property

Under time pressure to close before year-end and materially participate, Joey bought the property sight unseen, relying on an inspection rather than an in-person visit. He admits it likely led to some first-time-buyer mistakes, but felt the tax benefits alone justified the risk even if the deal only broke even.

Building a Remote Team From Scratch

With no local presence, Joey built his vendor network through Facebook groups, vetting cleaners and handymen based on local recommendations before ever meeting them in person. He advises new investors to think through everything that could break at a property in advance, like plumbing, HVAC, and pest control, rather than scrambling to find a vendor after something already has.

Then the Property Flooded

In April, a tenant flooded an upstairs bathroom, causing damage that ripped through the ceiling and flooded the unit below. The property has been offline since, with Joey hoping to reopen by the end of the month. He says his insurer, Proper, handled the claim well, though the lack of prior operating history made calculating the loss difficult, and coordinating with the mortgage lender added further delays.

Tax Play vs. Cash Flow Play

Joey says that while tax savings got him started, he is now just as focused on making the property cash flow. He warns that investors chasing write-offs on expensive properties can quickly burn through the tax benefit if the numbers do not also work as a business.

Looking Ahead

Joey hopes to eventually find a way to invest closer to home in California, but in the meantime plans to keep building out his Midwest portfolio now that the local team and systems are in place.