Through a cost segregation analysis, you have the potential to deduct up to 30-35% of your building’s original purchase price in the first year.

Buildings depreciate over time due to wear and tear. However, each building comprises various components (like lighting fixtures, HVAC systems, and others) that depreciate at faster rates—typically over 5, 7, or 15 years—compared to the standard 27.5 years for residential properties or 39 years for commercial properties.

By segregating these components, you can claim larger depreciation deductions early in the ownership period. This approach applies to both residential and commercial properties, significantly boosting your cash flow by spreading out tax deductions over shorter periods.