Accelerating Real Estate Growth: The Power of Cost Segregation

Cost segregation is becoming a powerful tool for multifamily property owners in Seattle looking to boost their cash flow and scale their portfolios. By taking a strategic approach to depreciation, owners can unlock significant tax savings that free up capital for reinvestment.

In a recent webinar hosted by Real Property Associates, industry experts explained how this often overlooked tax strategy can transform your bottom line. Whether you're planning renovations, acquiring new properties, or simply looking for ways to increase ROI, this session delivered practical insights worth exploring.

What Is Cost Segregation—and Why Does It Matter?

Cost segregation is a tax strategy that reclassifies certain components of a building for accelerated depreciation. Instead of depreciating the entire structure over 27.5 or 39 years, qualifying parts—like flooring, electrical systems, appliances, and even landscaping—can be depreciated over just 5, 7, or 15 years.

That reclassification leads to:

• Increased depreciation deductions in the early years of ownership
• Reduced taxable income
• Greater short-term cash flow for reinvestment or operational improvements

Even for smaller multifamily properties, this can mean tens of thousands in upfront tax savings. In markets like Seattle, where reinvestment and cash flow flexibility are key to staying competitive, those savings can accelerate portfolio growth.

Webinar Highlights

The RPA webinar featured expert guidance from cost segregation specialists, including real-world case studies and actionable advice. Key takeaways included:

Which Properties Qualify

Any income-producing property purchased, built, or renovated after 1987 may be eligible for cost segregation. This includes everything from newly constructed buildings to older properties that have changed ownership or undergone upgrades. The key is that the property generates income and has depreciable components.

Typical Tax Savings

Depending on the property type and timing, owners can often reclassify 20–40% of a building’s value into shorter-lived assets, leading to substantial upfront depreciation deductions. In some cases, that can mean tens or even hundreds of thousands in tax savings in the first year alone.

When to Conduct a Study

Cost segregation studies can be performed at any time, including retroactively. However, the ideal moment is shortly after acquiring, constructing, or renovating a property. Acting early allows owners to take advantage of maximum deductions and align tax strategy with broader investment goals.

Who Should Consider It

Multifamily owners planning to renovate, refinance, or expand their portfolios stand to gain the most. However, this strategy isn’t just for large investors—smaller owners looking to improve cash flow or strengthen exit strategies can benefit too. Cost segregation can also help optimize returns before selling or refinancing a property.

Learn More About Cost Segregation By Watching the Full Webinar

If you're a multifamily owner looking to strengthen your investment strategy, cost segregation deserves a closer look. When this method is applied effectively, even modestly sized properties can yield impressive results.

Real Property Associates is committed to helping our clients succeed with smart, ethical, and flexible strategies that deliver long-term value. We encourage you to watch the full session to learn more about how cost segregation can work for your portfolio.

Don’t leave money on the table. Watch the full session below and discover how cost segregation can accelerate your real estate returns.

In the meantime, if you have any questions, we’re here for you. Contact us today to build a smart, profitable investment strategy.