Strategy: Depreciate or demolish?

[Bryan Johns]

Hello everyone. 

I'm purchasing (first time CRE) some property in Texas that has been rezoned from residential to commercial. It still has an older home and very large storage shed / hanger in the back. My initial plan was to demo both structures ASAP, but now wondering if keeping the structures for a bit has "value" from a depreciation / tax perspective? I will eventually need to demo them to prepare for a new office/mixed-use development, but perhaps I wait until 2026? Current assessed/taxable value of property for 2025 is around $550,000 total ($400k land + $150k improvements).