Hi,Just watched the latest BP podcast about cost segs and it got me thinking....What happens after depreciation runs out on your property? 

Although I know most sec 8 landlords use it because of the perception of guaranteed rents.As a small home builder I really dont know how they are going to lower the cost of new construction housing unless the govmit subsidizes it somehow.. basically the price of home components are very sticky they only go up. with the xception of lumber that will go  up and down through out the year..

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

The mistake could be costly.

We currently work with many clients who do Cost Segs and using that STR loophole!

Just let them know upfront they’ll need to restock for longer stays.

It's great for cashflow and our entry level costs are lower than a lot of other markets.

If you paid $950k and only get $1M after selling costs, don’t bother with the 1031.

Imagine making millions of dollars over the course of your career and then having to pay 30-50% every year to uncle sam instead of compounding that cash over time.This is exactly what real estate professionals have learned to mitigate.To reduce their taxable income, they just buy a building every year, do a cost seg, and use depreciation to reduce their tax liability dramatically.Their personal wealth snowball grows much larger and much faster than their W2 counterparts who give most of their money back to the government each year.Following this strategy as a real estate professional is one of best ways to end up with a much larger net worth at the end of your career.

Unless it is a new build, and it comes with purchase warranties are an extra cost and may or may not even be executed when needed depending on the circumstances.