Buying vs. Renting Commercial Real Estate

[Sandra Holt]

My husband and I own a law firm and pay way too much in rent so we are looking to buy something.  As much as I'd like to buy an entire building, in my area that would cost $10M+ so we're looking at office condos.  I want to buy something ASAP, but my husband still isn't convinced that buying will save us money over the long run.  Can someone lay out the pros and cons to buying vs. renting commercial property?   Thanks!

[Joel Owens]

Commercial is generally depreciated over a 39 year period. There are cost segregation techniques which can sometimes have advanced depreciation more in certain years than in others. There is a limit on income made where you can take write offs but if you have a real estate professional status that can be one of the exemptions.

During the Trump administration there have been newer tax laws put in place and some advanced depreciation on purchases made within certain years.

I would not be taking tax advice from a commercial broker/agent. You should consult a tax professional on items relative to tax structure,implementation,timing,etc.

I would run by what you are doing with a tax specialist even if you do your own taxes a consult would be wise for guidance to validate what you are thinking is accurate. Not all tax specialists are equal so make sure they have experience with real estate. 

I tell my clients they need a tax specialist and that I do not give advice on taxes.

Steven Hamilton on here might be great to connect with on the tax side. There are a few others on here at Bigger Pockets as well. 

No legal advice given.