Cost segregation company

san jose, CA · Member since 2017 · 26 posts · 6 votes

I was going through the posts in bigger pockets and try to find a good company to do Cost Segregation. There was a company - remote cost seg. Any used them? This is for a Single family home we are using as Short term rental, so we dont want to go with big companies that charge $$$

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Costin I.

Rental Property Investor · Round Rock, TX · Member since 2016 · 1k+ posts · 971 votes

@Saravanan Varadan - Here is a CSS Decision Diagram flowchart intended to bring together all the various questions when assessing the benefits of a CSS (via a professional or DIY). Hope it will give you some guidance in your quest.

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Noah Laker
Real Estate Broker · Sacramento, CA · Member since 2021 · 518 posts · 410 votes
2y
Hey Saravanan, I'm a broker and investor in California.
For smaller properties (<$600k) we use KPKG cost seg. For more serious projects, we do an engineering-based cost seg with Cost Segregation Services.
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Michael PlaksPro Member
Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
2y
@Saravanan Varadan
You are probably talking about DIY software-based cost seg. The two most frequently used companies for this service are KBKG and DIYcostseg.
And read this post for a perspective on the issue:
https://www.biggerpockets.com/forums/51/topics/1136752-expla...
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Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
2y
I have used KPKG for smaller properties under 600k. You just have to know that their automated report is super conservative and will not get you the most out of your cost seg.
2 Reply
Costin I.
Rental Property Investor · Round Rock, TX · Member since 2016 · 1k+ posts · 971 votes
2y
@Saravanan Varadan - Here is a CSS Decision Diagram flowchart intended to bring together all the various questions when assessing the benefits of a CSS (via a professional or DIY). Hope it will give you some guidance in your quest.
2 Reply
Julio GonzalezPro Member
Specialist · West Palm Beach, FL · Member since 2008 · 4k+ posts · 1k+ votes
2y
@Saravanan Varadan Here's an article with things to consider when selecting a cost segregation company. Feel free to reach out if you have any questions!
https://www.biggerpockets.com/forums/51-tax-legal-issues-con...
561-253-6640
1 Reply
January Johnson
Real Estate Agent · Emerald Coast, FL · Member since 2016 · 820 posts · 487 votes
2y
@Yonah Weiss is the Cost Seg King. Check him out!
1 Reply
Sagiv O.
Real Estate Investor · Austin, TX · Member since 2017 · 116 posts · 31 votes
8mo
For a SFH STR, you're right to avoid the big firms — an engineered study from them typically runs $3k–$16k and just doesn't pencil on a single property.

A few things worth knowing before you pick a provider:

1. Make sure the study methodology is defensible. Software-based studies vary a lot in quality. Some are basically a questionnaire with rough percentages — fine for smaller assets, but you want something with a clear, rules-based asset breakdown your CPA can stand behind.

2. For a residential STR, you're typically looking at reclassifying personal property (5-year) and land improvements (15-year) out of the 27.5-year bucket. On a solid purchase price, that can be meaningful accelerated depreciation in year one.

3. There are now lower-cost options that produce legitimate, CPA-friendly reports without the $5k price tag. Room42.io is one — around $525, built specifically for residential investors, and it includes optional CPA review if you want that extra layer. Worth looking at alongside the other options mentioned here.

Most importantly: confirm with your CPA that you can actually use the losses (material participation + income thresholds) before spending anything on the study itself.
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- Natalie KolodijBusiness Member
  Moderator
  Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
  7mo
  Quote from @Sagiv O.:
  
  For a SFH STR, you're right to avoid the big firms — an engineered study from them typically runs $3k–$16k and just doesn't pencil on a single property.
  
  A few things worth knowing before you pick a provider:
  
  1. Make sure the study methodology is defensible. Software-based studies vary a lot in quality. Some are basically a questionnaire with rough percentages — fine for smaller assets, but you want something with a clear, rules-based asset breakdown your CPA can stand behind.
  
  2. For a residential STR, you're typically looking at reclassifying personal property (5-year) and land improvements (15-year) out of the 27.5-year bucket. On a solid purchase price, that can be meaningful accelerated depreciation in year one.
  
  3. There are now lower-cost options that produce legitimate, CPA-friendly reports without the $5k price tag. Room42.io is one — around $525, built specifically for residential investors, and it includes optional CPA review if you want that extra layer. Worth looking at alongside the other options mentioned here.
  
  Most importantly: confirm with your CPA that you can actually use the losses (material participation + income thresholds) before spending anything on the study itself.
  
  For $525 is that a study that utilizes AI to identify components of a property through photos?
  Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
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  Website View Page
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- Sagiv O.
  Real Estate Investor · Austin, TX · Member since 2017 · 116 posts · 31 votes
  7mo
  Quote from @Natalie Kolodij:
  
  Quote from @Sagiv O.:
  
  For a SFH STR, you're right to avoid the big firms — an engineered study from them typically runs $3k–$16k and just doesn't pencil on a single property.
  
  A few things worth knowing before you pick a provider:
  
  1. Make sure the study methodology is defensible. Software-based studies vary a lot in quality. Some are basically a questionnaire with rough percentages — fine for smaller assets, but you want something with a clear, rules-based asset breakdown your CPA can stand behind.
  
  2. For a residential STR, you're typically looking at reclassifying personal property (5-year) and land improvements (15-year) out of the 27.5-year bucket. On a solid purchase price, that can be meaningful accelerated depreciation in year one.
  
  3. There are now lower-cost options that produce legitimate, CPA-friendly reports without the $5k price tag. Room42.io is one — around $525, built specifically for residential investors, and it includes optional CPA review if you want that extra layer. Worth looking at alongside the other options mentioned here.
  
  Most importantly: confirm with your CPA that you can actually use the losses (material participation + income thresholds) before spending anything on the study itself.
  
  For $525 is that a study that utilizes AI to identify components of a property through photos?
  
  @Natalie Kolodij - Yes! Room42.io has a built-in AI detection model—just drag and drop your property photos to get a list of suggested items to depreciate. Give it a try!
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