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Updated over 4 years ago on . Most recent reply
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Optimal rental property purchase to utilize Bonus Depreciation
I am trying to determine what the best strategy is to utilize the 100% bonus depreciation for rental properties. What property types/ number of units/ remodel or not give me the best chance to have a high percentage of the property be classified as personal property for bonus depreciation in a cost segregation study?
I am a physician and my wife is a realtor, actively participates in real estate. My student loans are 10% of our adjusted gross income. My goal is to lower my AGI as much as possible to lower my student loan repayment. My plan is to buy rental properties and do a cost seg to take advantage of the 100% bonus depreciation. This will lower my student loan payments for that year significantly.
In peoples experience how should I best spend my money in real estate to get the highest bonus depreciation? Since it is mainly things like furnishings and appliances would it make more sense to buy a 4-plex vs a SFH? Does anyone know how much personal use property percentage is in a typical SFH vs 4-plex? Would I be better off buying a fixer upper and spending money on updates? Should my strategy be to spend on of out capital on the down payment to buy a more expensive rental with a large cost basis?
Not sure of the above terms are used correctly... Thanks for the input
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@yonah Wiess I never even thought of a mobile home park. That is a great idea. In your experience would doing a cost seg on a SFR be cost efficient? Or would it make more sense to have a large unite property?