Property Managers Add Value with Cost Segregation Studies

If you’re a property manager, your responsibilities range from:

·       Handling Lease Agreements

·       Rent Collection

·       On-site Maintenance

·       Financial Services

·       And more!

With all that you do, how can you add value to the services you provide? Do more than just keep the property profitable. Create a positive ownership experience for your client and ensure they get the most out of their investment by suggesting a Cost Segregation Study. And be prepared to explain how a CSS could benefit your client’s bottom line.

Investments aren’t in a Property Manager’s Job Description

That’s true (unless you have an unconventional contract with your client). But it’s always best to go above and beyond, proving you are an asset your client should hold onto. Property owners have entrusted you to maximize the return on the investment they’ve made in their building.

By understanding investment strategies, you can see the income possibilities in the properties you manage from an owner’s perspective. Offering this benefit to your clients can set you apart from other property managers.

Suggest Cost Segregation as an Additional Source of Cash Flow to Property Owners

As a property manager, you have all the property information needed to solicit a no-cost, no-obligation, cost segregation proposal. Our proposal will lay out the benefits of cost segregation and the costs to complete the comprehensive study. Then, as the property manager, you can present the proposal to the property owner or their CPA to determine the overall tax benefit to the owner.

Taking this step sends a message to the property owner that you are willing to go the extra mile and think outside of the box to maximize the return on their investment. In addition, this will solidify your relationship with the property owner.

How Does Cost Segregation Work?

First, it is important to understand the concept of depreciation. The IRS allows property owners to take tax deductions based on real estate’s perceived decrease in value (depreciation). However, often that perception isn’t even accurate, and the real estate isn’t decreasing in value.

In a cost segregation analysis, elements of the property will fall into two categories:

Real Property

This includes permanent and immobile things, like the foundation or roof of a building.

Personal Property

This includes things like kitchen cabinets, HVAC units, vertical blinds, etc.

The Cost Segregation Analysis

The real property components depreciate over a period of 27.5 years, but the personal property components depreciate over shorter periods — five, seven, or 15 years. Which length of time depends on the specific element being depreciated.

A cost segregation analysis takes stock of the individual assets of a property. Then it accelerates depreciation by taking anything that can be considered personal property and categorizing it as such rather than real property. This recategorization makes it possible to deduct more from your taxes.

Concepts like these might scare away some in the property management industry. But learning to save property owners money through investment is as essential as saving them money on maintenance, and that’s a benefit most management companies don’t provide. You can! And it will set you apart from the rest of the competition.

Find out How to Save Your Property Owner Money Today!

Every M&E Cost Segregation Study includes a Building Systems Summary & Detail Report that details the baseline costs of the Building Structure and its Building Systems.

Get a no-cost, no-obligation estimate from M&E Cost Segregation.

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