As someone in the cost segregation industry, I have heard my fair share of misconceptions about it. It’s a complicated tax strategy—I get it! What’s unfortunate is that sometimes those misconceptions can deter folks away from cost segregation, even though it could make sense for them to use it.
My advice? Don’t leave money on the table!
Demystifying Cost Segregation
One of the biggest cost segregation misconceptions I have heard is, “The building’s basis is too low for a study.”
Now, some may say that cost segregation would make sense only for buildings over $1 million in basis; however, the good news is, that’s not true.
In fact, cost segregation studies can be done on buildings under $500,000 in basis.
You get cost seg! And you get cost seg! Cost segregation for everyone! (Channeling my inner Oprah.)
As a real estate investor, there’s a good chance you own property under $500,000 in basis (after land has been carved out). You may think that a cost segregation study wouldn’t make economic sense—which is true!
However, the good news is there are “economical” solutions out there that are more cost-effective than a full-blown cost segregation study.
Check out the rest of our article on BiggerPockets! Think Cost Segregation Is Too Expensive? Here’s Why You’re Wrong.