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PurposeUS taxing authorities allow property investment to be separated into components. The purpose of this paper is to demonstrate how the classification of property affects the amount and timing of depreciation. Increased and accelerated depreciation increases after-tax cash flows and investor returns.Design/methodology/approachThis paper explains traditional methods to analyze real estate investments and introduces modified methods that include the effect of taxes to improve the estimate of the potential return to the investor. Commonly used property classification methods are evaluated and projections are used to demonstrate the impact on investor returns.FindingsModified methods may improve return estimates and appropriately classifying property improves investor returns.Practical implicationsAfter-tax cash flows should be used to analyze potential real estate investments and properties should be accurately classified to maximize returns.Originality/valueThis paper demonstrates how to analyze real estate investments and maximize returns.