Larger Cost Segregation opportunity with SFH or Condo?

[Tyler Neison]

Hi, 

I'm looking into purchasing another investment property in the Destin, Naples, or similar area this year to use predominately as a STR. My active income will be at its highest level this year, so the goal with this purchase would be to help offset this as much as I can to reduce my tax liability hence the STR. If the property can produce enough income to offset the mortgage and other liabilities/reserves then it's a win for me. With all of this said, in general, would I find a bigger opportunity for deductions with a SFH property or a condo? I am aware of the qualifications that must be met to be able to classify the income and expenses from this property as active and not passive...

Thanks!

[Matt "Roar" Gardner]

Quote from @Kyle Momany:

Quote from @Tyler Neison:

Hi, 

I'm looking into purchasing another investment property in the Destin, Naples, or similar area this year to use predominately as a STR. My active income will be at its highest level this year, so the goal with this purchase would be to help offset this as much as I can to reduce my tax liability hence the STR. If the property can produce enough income to offset the mortgage and other liabilities/reserves then it's a win for me. With all of this said, in general, would I find a bigger opportunity for deductions with a SFH property or a condo? I am aware of the qualifications that must be met to be able to classify the income and expenses from this property as active and not passive...

Thanks!

 Tyler,

First, congrats on the current portfolio! 

Second, I'm not CPA or Tax Pro - But, I can tell you from experience, we were able to depreciate our SFH more than our condo. We did a cost seg to accelerate said depreciation, and the cost vs loss on the condo just didn't seem worth it.

I hope this helps, feel free to reach out with any questions!

 @Tyler Neison - I just executed 5 cost segs on my condos in Niceville and one on my 5 bedroom STR in PCB. We also did a few apartment complexes last year and my RV Park. It really comes down to the property itself. I'm sure @Yonah Weiss has some much better insight on general trends.   

My recommendation - Focus on finding the best investment opportunity and allow the tax cards to land where they may.  Don't let the tail wag the dog ~ 

I wish you the best of luck! Let me know what you find out :)