Maximize Your Tax Savings with Strategic Depreciation
If you’re a real estate investor, one of the most powerful (and often overlooked) ways to improve your cash flow is through cost segregation. A cost segregation study can help you reduce your taxable income by accelerating depreciation — sometimes by tens or even hundreds of thousands of dollars.
At RealWealth, we don’t offer cost segregation services ourselves, but we’ve vetted a few trusted cost segregation firms that specialize in working with real estate investors.
Whether you’re holding residential rentals, short-term rentals, multifamily, or commercial assets, these partners can help you uncover hidden tax savings and keep more of what you earn.
What Is Cost Segregation in Real Estate?
Cost segregation is a tax strategy that allows you to break down a property into its individual components — like flooring, plumbing, lighting, and appliances — and depreciate many of them over 5, 7, or 15 years instead of the standard 27.5 or 39 years.
This results in:
- Larger depreciation deductions up front
- Reduced taxable income in early ownership years
- Improved cash flow and ROI
It’s especially powerful when combined with bonus depreciation, which allows you to write off certain components entirely in year one (for eligible assets).
When to Consider a Cost Segregation Study
- You’ve purchased an investment property worth $300K or more
- You’re earning enough income to benefit from depreciation offsets
- You’re involved in a real estate syndication or own commercial property
- You’re looking for tax strategies for short-term rentals
- You want to improve cash flow in the early years of ownership
Meet Our Trusted Cost Segregation Partners
The cost segregation partner we refer to has worked with countless investors nationwide. They understand how to structure studies that withstand IRS scrutiny. This trusted company has been vetted for experience, responsiveness, and investor-focused service.
Why Work With a Specialist?
Real Estate-Specific Expertise
These aren’t general accounting firms. Our partners work exclusively or primarily with real estate assets and understand the nuances of depreciation rules, passive activity loss limitations, and bonus depreciation.
Maximize Your Tax Savings
The right cost segregation study can unlock tens of thousands in accelerated deductions, especially in high-value properties or portfolios.
Audit-Ready Documentation
All our referred firms provide engineering-based studies and detailed documentation to withstand IRS scrutiny and support your CPA’s filings.
Frequently Asked Questions
Is cost segregation worth it for single-family rentals?
It can be, especially for higher-value properties or portfolios. Even on a $300K investment property, a study might generate $20K–$60K in year-one deductions.
Can I use cost segregation for a short-term rental?
Yes — and in some cases, STRs may qualify for material participation status, allowing active income offsets. Ask your CPA and the provider you choose.
How does cost segregation impact a 1031 exchange?
Depreciation taken via cost seg lowers your basis, which can increase taxable gain later. A good tax strategy can help offset this via a 1031 or other planning tools.
What’s the cost of a cost segregation study?
It varies based on property type and value. Most studies range from $3,000–$7,000, but the potential tax savings are often 10–20x the cost.
Can I do cost segregation retroactively?
Yes, through a “look-back” study, you can retroactively apply accelerated depreciation to prior years and amend your tax returns.
Related Cost Seg Resources
If you’re interested in learning more, you might like this article: How To Maximize Rental Property Depreciation.
We Don’t Sell These Services. We Just Know Who’s Good
RealWealth is not a cost segregation provider. We refer investors to experts who’ve delivered real results for our members.
Because smart investing isn’t just about buying the right property — it’s about keeping more of what you earn.
