Longer hold periods allow investors to capture more of the 27.5-year depreciation schedule, providing consistent annual deductions that reduce taxable income over time without impacting cash flow, leading to sustained tax deferral and improved after-tax yields.

Cost segregation studies reclassify 20-35% of a property's basis into shorter recovery periods (5, 7, or 15 years), accelerating deductions and front-loading tax savings; extended holds ensure these benefits are fully realized, allowing reinvestment of early-year savings for compounded growth while deferring any potential tax implications.

Holding properties longer defers capital gains taxes and depreciation recapture (taxed at up to 25% under §1250 rules), avoiding immediate tax hits from sales; this is particularly efficient when combined with strategies like 1031 exchanges, which roll over gains into new properties without current taxation.

Fewer property turnovers from longer holds minimize recurring expenses such as closing fees, commissions, title searches, and transfer taxes, directly cutting unnecessary costs and enhancing overall net returns.

By deferring taxes via ongoing depreciation and cost segregation, longer holds allow tax savings to compound through reinvestment and potentially enabling a stepped-up basis at death to eliminate deferred taxes for heirs.