Invested in property and looking to enjoy significant tax savings and maximize cash flow? Then you need cost segregation, a tax strategy that can dramatically accelerate depreciation deductions.
While cost segregation can appear straightforward in theory, it requires expert hands to get right. That’s why it’s important for real estate investors to work with a service provider that has a proven track record of success. Remember: while cost segregation can unlock considerable savings, it’s not guaranteed. Working with the wrong cost segregation service can end up costing more time, energy, and money than it saves.
With that in mind, we thought it’d be a good idea to put together a ranked list of the best cost segregation service providers on the market. By working with one of the following, you should find that you unlock all the benefits of using the cost segregation tax strategy.
R.E. Cost Seg: Best Overall Cost Segregation Service Providers
For R.E. Cost Seg, the proof of their experience and expertise is in the numbers. They’ve delivered tax savings totalling more than $1.5b for more than 15,000 properties. In other words: they have a proven track record of success.
They work with a wide range of properties, including short-term rentals, warehouse facilities, apartment complexes, shopping centers, and hotels and motels, and have received high praise from their clients for the quality, speed, and cost of their work. While they’re known for offering best-in-class cost segregation studies, they do so at a cost that’s much more affordable than traditional providers. They also use advanced technology that often removes the need for onsite visits, helping to complete studies within fast turnaround times, though they also provide a ‘fully engineered service’ that includes an onsite visit.
All in all, we found that there was much to love about R.E. Cost Seg, which has rightly earned its reputation as one of the best in the business.
Kroll: Best for Institutional Property Investors
Kroll offers a wide range of cost segregation services, including engineering-based analysis, look-back studies, REIT-specific studies, and IRS audit defence strategies. In other words: this is a cost segregation service provider that has vast experience in helping property investors, especially those with large commercial portfolios, benefit from considerable tax savings. With that said, smaller investors may find that this isn’t the right option for them. While offering expert cost segregation services, it’s only one aspect of Kroll’s services.
BDO: An Experienced Cost Segregation Service Provider
BDO, one of the largest accounting and advisory networks in the world, offers cost segregation services to real estate developers and investors, industrial facilities, and private equity investors — and have done so for more than thirty years. Their vast experience and expertise, which is among the best in the world, can give investors looking to optimize their tax strategies to unlock savings confidence that they’re in highly capable hands. As with Kroll, however, it’s worth remembering that cost segregation is only one of many services that BDO offers. For complex situations and for investors looking for a more boutique service, another firm may be more appropriate.
KBKG: A Good Option For Smaller Property Investors
KBKG was founded back in 1999, and during that time have helped clients unlock billions in tax savings. They’ve gained a reputation for delivering big savings, fast, providing savings that average $23,600 in the first tax year on $300,000 property purchases, all using intuitive software that can create reports in minutes. The only potential downside is that their software is not designed for properties with a value that exceeds $1.5 million, though they do offer professional cost segregation services for larger properties.
CSSI – Cost Segregation Services: 23 Years of Experience
CSSI is one of the biggest cost segregation service providers in the country. Having completed tens of thousands of studies that have helped their clients save more than $10 billion in tax savings, they’ve become the go-to option for many CPAs, real estate investors. With 23 years of experience, they’ve demonstrated time and time again that they’re capable of delivering savings, and they also claim to have never been on the receiving end of an IRS audit.
Madison SPECS: Efficient, Reliable Cost Segregation Service Provider
Madison Specs have more than two decades of experience, and during that time have worked on tens of thousands of cost segregation studies, helping their clients save more than $30 billion in taxes. They work with investors of all sizes, from single property investors to the largest companies, helping them to unlock upfront savings immediately.
Engineered Tax Services (ETS): Good for High Net Worth Individuals
Engineered Tax Services works with investors, businesses, and high net worth individuals to strategically and legally reduce their tax obligations. By taking an innovative, in-depth approach to their cost segregation studies, ETS are able to unlock every dollar of potential savings, ensuring that their clients can keep as much of their money as possible.
McGuire Sponsel: A Reliable Option for CPA Firms
McGuire Sponsel takes an advanced, methodical approach to their cost segregation studies — and that’s why they’re viewed as one of the leaders in the industry, and why they’re trusted by more than 350 CPA firms. With that said, the fact that they’re so trusted by CPA firms can be a downside, since it means that everyday individuals may find that they’re not the right fit.
CohnReznick: Good for High-Value Properties
CohnReznick works with large-scale property investors to provide cost segregation studies that integrate with broader tax planning strategies, allowing them to uncover additional savings. Their services are aimed at high-value properties, with most properties requiring a value of more than $2 million to be eligible.
As we’ve seen, there’s no shortage of excellent cost segregation service providers available to real estate investors, including our standout choice, R.E. Cost Seg. By taking the time to find the right one for your needs, you can help to save as much money in taxes as possible and improve your property investment cash flow.
