Cost Segregation in Savannah, GA

Where Southern charm meets global commerce — Savannah's booming port economy, tourism-driven STR market, and Georgia's full bonus depreciation create a dual-income investment thesis that delivers both cash flow and massive tax savings.

Population
400K
Median Home
$320K
Rent (3BR)
$1,900
Property Tax
0.92%
Annual Job Growth
8K+
Ranking
Port + Tourism
Overview

Value Props for Investors

PORT BOOM
America's #3 Port Is Doubling Capacity

The Port of Savannah handles $140B+ in annual trade and is expanding container capacity by 60%. This expansion is creating thousands of logistics, warehouse, and transportation jobs driving housing demand across the metro.

TOURISM GOLDMINE
15M+ Annual Visitors Drive Premium STR Revenue

Savannah's Historic District, River Street, and SCAD-driven arts scene attract millions of tourists. STR properties in the Historic District can gross $45K+ annually — 60% more than comparable LTR rents.

FULL CONFORMITY
GA Full Bonus Dep + 5.49% State Rate

Georgia's full IRC conformity means both federal and state cost seg benefits hit in Year 1. The 5.49% state rate adds nearly $4,000 in state savings to your federal benefit — the most generous state-level boost in the Southeast.

Tax Strategy

Cost Segregation & Tax Rules in Savannah, GA

Understanding how federal and Georgia state tax rules interact is critical to maximizing your cost segregation benefits in Savannah.

Cost Seg Overview
State vs. Federal Rules
Tax Landscape
Typical Purchase
$320,000
Building Value
75%
25% land / 75% building
Cost Seg Range
25-40%
of building reclassified
Home Age
35 yrs
Built ~1989
What Gets Reclassified

A cost segregation study identifies building components that can be depreciated over 5, 7, or 15 years instead of the standard 27.5 or 39 years. In Savannah, typical reclassification rates are 25-40% of building value.

Purchase Price Breakdown
Building 75%$240,000
Land 25%$80,000
Building Value Reallocation (with Cost Seg)
5-Year Property18%
$43,200
15-Year Property12%
$28,800
27.5 / 39-Year (Remaining)70%
$168,000

5 & 15-year components ($72,000 = 30% of building) are eligible for bonus depreciation in Year 1.

Overline Study Cost & ROI
Overline Study Cost
$499 - $2,000
Avg. ROI
10-40x

The math: A $320,000 property with 75% building value and 30% reclassification yields ~$26,640 in Year 1 federal tax savings at the 37% bracket — significantly more ROI than traditional studies costing $5,000-$10,000+.

Housing Stock Advantage

With a median build year of 1989, Savannah's housing stock has identifiable components (HVAC, electrical, plumbing, landscaping) that are strong candidates for accelerated depreciation.

Full Conformity
Georgia Bonus Depreciation Conformity

Georgia conforms to federal bonus depreciation under Section 168(k), enabling 100% first-year deductions on both federal and state returns. As GA transitions to a flat 5.49% income tax, cost seg studies deliver substantial combined savings — particularly for investors in Atlanta's high-growth corridors.

What This Means for Savannah Investors: Full conformity means cost seg benefits are maximized in Georgia. Federal AND state deductions apply in Year 1. The 5.49% flat rate provides meaningful state savings on top of federal benefits — and both hit your pocket immediately.

Federal vs. GA Depreciation Timeline
PeriodFederal TreatmentGA State Treatment
Year 1100% bonus depreciation100% bonus depreciation (full conformity)
Years 2+Standard MACRS schedulesSame as federal
Section 179 Expensing
State ConformityConforms

GA conforms to federal Section 179 expensing limits. For Atlanta's growing multifamily market, Section 179 can capture additional deductions on qualifying fixtures and equipment beyond what cost segregation covers.

Key Takeaway

A $370K property with a $289K depreciable basis and 30% cost seg reclassification yields ~$32,035 in federal tax savings PLUS ~$4,753 in GA state tax savings in Year 1 — a total of ~$36,788.

Bottom Line

Georgia is a full-conformity state. Every dollar of federal bonus depreciation flows through to your GA state return with no addback or modification. The 5.49% state rate adds a substantial, immediate state-level benefit to your federal savings.

Local Property Tax
0.92%
Savannah effective rate
Transfer Tax
$1 per $1,000 of sale price (0.1%)
State Income Tax
5.49%
Flat (recently changed from progressive)
Property Tax Details

Chatham County effective rate of ~0.92% is moderate. Historic District properties may qualify for preservation tax incentives that reduce bills further.

Assessment Methodology
MethodFair market value at 40% assessment ratio
Reassessment CycleAnnually
Assessment BodyCounty Board of Tax Assessors
Appeal WindowWithin 45 days of assessment notice
Appeal Success Likelihood
Good
LowModerateGoodVery High

Georgia's 40% assessment ratio means a $300K property is assessed at $120K. Annual reassessments in fast-growing counties (Fulton, Gwinnett, Cobb) frequently over-assess, creating strong appeal opportunities. The Board of Equalization provides a free first-level appeal.

Work with Overline — Our team helps Savannah investors identify over-assessed properties and file tax appeals. A successful appeal can save thousands annually and compounds your cost seg savings.

Illustrative Example

Cost Seg Example for Savannah, GA

This example assumes a purchase eligible for 100% bonus depreciation. All factors below are based on averages from our historical cost segregation studies for GA properties. To see your exact savings, run a property-specific cost seg analysis below.

Typical Savannah, GA Property Details
$
50%95%
5%35%
2%25%
Total Reclassified30% of building
10%37%
Estimated Year 1 Tax Savings
Building Value$240,000
$320,000 x 75%
Normal Annual Depreciation$8,727
$240,000 ÷ 27.5 yr (residential)
5-Year Reclassified$43,200
15-Year Reclassified$28,800
Total Accelerated$72,000
30% of $240,000 building value
Federal Tax Savings (Year 1)$26,640
$72,000 x 37% bracket
GA State Tax Savings (Year 1)$3,953
Total Year 1 Tax Savings$30,593
8.3x normal annual deduction captured in Year 1

GA State Tax: GA has full bonus depreciation conformity — both federal and state savings hit your pocket in Year 1.

Insurance & Risk

Insurance Landscape in Savannah

Insurance costs directly impact your cash flow. Understanding Savannah's risk profile helps you budget accurately and avoid coverage gaps.

Avg. Annual Premium
$2,300
Savannah average
State Average
$2,000
13% below average (statewide) / above average on coast
National Average
$2,300
for comparison
Key Risk Drivers
1
Hurricanes and tropical storms
2
Coastal flooding and storm surge
3
Severe thunderstorms
Coverage Recommendations
Standard homeowner's policy with replacement cost coverage
Flood insurance recommended in Savannah coastal areas and low-lying Atlanta zones
Wind/hail deductible awareness (typically 1-2% of dwelling coverage)
Umbrella liability ($1M+) for rental property portfolios
Cost Seg + Insurance Connection

A cost segregation study documents building components and their values in detail — this supports accurate insurance replacement cost estimates. Georgia investors who complete a cost seg study are better positioned to negotiate premiums and substantiate claims after storm events.

Revenue Comparison

STR vs. Long-Term Rental in Savannah

Compare short-term (Airbnb) and long-term rental income for a typical Savannah investment property.

Long-Term Rental
Monthly Rent (3BR)$1,900
Annual Gross$22,800
Vacancy Rate4.8%
Net Annual$21,706
Tenant StabilityModerate — port and healthcare workers provide stable base; military families cycle through every 2-3 years
Depreciation Schedule27.5 years
Residential rental property
Tax TreatmentPassive Only
Losses can only offset passive income unless you qualify as a Real Estate Professional (750+ hrs/yr)
Short-Term Rental
Avg. Nightly Rate$185
Occupancy Rate70%
Annual Gross Revenue$47,268
Net Annual (after expenses)$33,088
ManagementSelf or 20-25% PM fee
Depreciation Schedule39 years
Classified as commercial / transient use property
Tax TreatmentActive Income Eligible
Losses can offset W-2 / active income if you document 100+ hrs of material participation and meet IRS criteria
Cost Seg + STR Loophole

Savannah's STR overlay zones create a supply-constrained market where permitted properties command premium rates. A Historic District STR grossing $47K+ annually while capturing $30.6K in Year 1 cost seg savings delivers a total return profile that's hard to match in any other sub-$350K market.

Market Fundamentals

Economy & Housing Demand in Savannah

Strong economic engines create stable rental demand. Here is what drives Savannah's economy and housing market.

Median Income
$52,000
Rent-to-Income
30%
Healthy ratio
Vacancy Rate
4.8%
Pop. Growth
+1.5% annually
Major Employers
1
Gulfstream Aerospace (10K+)
2
Memorial Health (7K+)
3
Port of Savannah (5K+ direct)
4
Fort Stewart (nearby, 20K+)
5
SCAD (3K+)
6
JCB (2K+)
Top Industries
Port & Logistics
Aerospace & Manufacturing
Tourism & Hospitality
Military & Defense
Healthcare
Landlord & STR Rules
Landlord Friendliness
Very Friendly
Eviction Timeline
30-45 days
STR Regulation
Permitted in designated zones

Savannah has a STR overlay zone system. The Historic District and Starland District allow STRs with a permit. Residential zones outside overlay areas have restrictions. Check zoning before purchasing for STR use.

Why Invest Here

Savannah offers a rare combination of tourism STR revenue and industrial employment stability. The Port of Savannah (America's #3 container port) is expanding massively, creating thousands of logistics jobs. Gulfstream builds private jets here. Tourism draws 15M+ visitors annually to the Historic District. GA's full conformity makes the $30.6K Year 1 tax savings math work perfectly alongside premium STR revenue.

Where to Invest

Top Neighborhoods in Savannah

#1
Historic District
Iconic squares, cobblestone streets, and premium tourism demand
Price
$420K
Rent
$2,200
Yield
6.3%
Savannah's crown jewel for STR. Permitted properties in the overlay zone command $185+ nightly rates with 70% occupancy. Historic buildings yield high cost seg reclassification from distinct architectural components.
$420K$2,2006.3%
Savannah's crown jewel for STR. Permitted properties in the overlay zone command $185+ nightly rates with 70% occupancy. Historic buildings yield high cost seg reclassification from distinct architectural components.
Savannah's crown jewel for STR. Permitted properties in the overlay zone command $185+ nightly rates with 70% occupancy. Historic buildings yield high cost seg reclassification from distinct architectural components.
#2
Starland District
Arts-driven neighborhood with SCAD students and creative energy
Price
$350K
Rent
$1,900
Yield
6.5%
Growing STR and LTR demand from SCAD students, faculty, and tourism overflow from the Historic District. Gentrification trajectory with strong appreciation potential.
$350K$1,9006.5%
Growing STR and LTR demand from SCAD students, faculty, and tourism overflow from the Historic District. Gentrification trajectory with strong appreciation potential.
Growing STR and LTR demand from SCAD students, faculty, and tourism overflow from the Historic District. Gentrification trajectory with strong appreciation potential.
#3
Pooler / West Chatham
Rapidly growing suburb near the port and I-95 corridor
Price
$280K
Rent
$1,700
Yield
7.3%
Port expansion is driving massive growth. Newest housing stock in the metro with excellent cost seg component breakdown. Best cash flow play in the Savannah area.
$280K$1,7007.3%
Port expansion is driving massive growth. Newest housing stock in the metro with excellent cost seg component breakdown. Best cash flow play in the Savannah area.
Port expansion is driving massive growth. Newest housing stock in the metro with excellent cost seg component breakdown. Best cash flow play in the Savannah area.
#4
Richmond Hill / Bryan County
Suburban family community between Savannah and Fort Stewart
Price
$310K
Rent
$1,800
Yield
7.0%
Military families from Fort Stewart drive consistent rental demand with BAH housing allowances. Newer construction with strong depreciable basis.
$310K$1,8007.0%
Military families from Fort Stewart drive consistent rental demand with BAH housing allowances. Newer construction with strong depreciable basis.
Military families from Fort Stewart drive consistent rental demand with BAH housing allowances. Newer construction with strong depreciable basis.
Local Partners

Investor-Friendly Partners in Savannah, GA

We are building a curated directory of top investor-friendly brokers, property management companies, and service providers in Savannah, GA.

Investor-Friendly Brokers

Top real estate agents who specialize in investment properties and understand cost segregation, 1031 exchanges, and cash-flow analysis.

Coming Soon
Property Management

Vetted property managers who handle tenant screening, maintenance, and rent collection for both long-term and short-term rentals.

Coming Soon
Insurance Agents

Independent insurance agents who specialize in rental property coverage and can leverage cost seg data for accurate replacement cost estimates.

Coming Soon

Are you a broker, property manager, or insurance agent serving investors in Savannah, GA?

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Frequently Asked Questions

Cost Segregation FAQ — Savannah, GA

How much can I save with cost segregation in Savannah, GA?

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On a typical $320K property in Savannah, cost segregation can yield approximately $30,593 in Year 1 combined federal and state tax savings at the 37% bracket, with a study ROI of 680%. Overline studies cost $499-$2,000.

What is the property tax rate in Savannah?

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The effective property tax rate in Savannah is approximately 0.92%. Chatham County effective rate of ~0.92% is moderate. Historic District properties may qualify for preservation tax incentives that reduce bills further.

Is Savannah a good market for real estate investing?

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Savannah offers a rare combination of tourism STR revenue and industrial employment stability. The Port of Savannah (America's #3 container port) is expanding massively, creating thousands of logistics jobs. Gulfstream builds private jets here. Tourism draws 15M+ visitors annually to the Historic District. GA's full conformity makes the $30.6K Year 1 tax savings math work perfectly alongside premium STR revenue.

What is the average insurance cost for rental properties in Savannah?

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The average annual homeowner insurance premium in Savannah is approximately $2,300. Savannah's coastal location increases insurance costs. Flood insurance is essential for properties in FEMA flood zones, adding $800-2,000/year. Inland Savannah neighborhoods have lower premiums. Factor insurance carefully into STR cash flow projections.

What are the STR and landlord rules in Savannah?

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Savannah is rated "Very Friendly" for landlords. STR regulation: Permitted in designated zones. Eviction timeline: 30-45 days. Savannah has a STR overlay zone system. The Historic District and Starland District allow STRs with a permit. Residential zones outside overlay areas have restrictions. Check zoning before purchasing for STR use.

Who are the major employers in Savannah?

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Major employers in Savannah include Gulfstream Aerospace (10K+), Memorial Health (7K+), Port of Savannah (5K+ direct), Fort Stewart (nearby, 20K+), SCAD (3K+). Top industries: Port & Logistics, Aerospace & Manufacturing, Tourism & Hospitality, Military & Defense, Healthcare.

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