Can I do a cost segregation study on a property I bought years ago?

Yes. The IRS allows a "look-back" study using Form 3115 to claim missed depreciation on properties purchased in prior years without amending old returns.

How much does a cost segregation study cost?

Engineering-based studies for residential rentals in Orlando typically range from $1,500 to $5,000 depending on property size and complexity. The first-year tax savings almost always exceed the study fee by a wide margin.

Free Tax Savings Tool

Orlando Cost Segregation Calculator.

Q: What is a cost segregation study?

A cost segregation study is an IRS-recognized engineering analysis that reclassifies components of a rental property from 27.5- or 39-year depreciation into 5, 7, and 15-year buckets. The result is significantly larger depreciation deductions in the early years of ownership.

Q: Does cost segregation make sense for an Orlando rental property?

Most single-family rentals, multifamily buildings, vacation rentals, and commercial properties in the Orlando metro with a depreciable basis above roughly $200,000 will see meaningful tax savings from a cost segregation study, often equal to 5%-9% of the purchase price recaptured in year one.

Estimate first-year tax savings on your Central Florida rental property in under sixty seconds. No email required.

Why Orlando investors run the numbers

One study. A decade of accelerated cash flow.

5–9%

of purchase price

Typical first-year tax deduction unlocked by reclassifying components into 5, 7, and 15-year property.

20–40%

of basis reclassified

Carpet, cabinetry, fixtures, landscaping, and site improvements pulled out of the 27.5-year shell.

< 60 days

study turnaround

From initial property walk-through to a fully documented engineering report, audit-ready.

The basics

What a cost segregation study actually does for an Orlando rental.

When you buy a rental property, the IRS makes you depreciate the entire building over 27.5 years for residential or 39 years for commercial — a slow, evenly-spread deduction that ignores the real economic life of what's inside the walls.

A cost segregation study sends an engineer through the property to identify every component that legally qualifies for a shorter recovery period: cabinetry, flooring, dedicated electrical, decorative lighting, security and AV wiring, removable countertops, pool equipment, lanai screening, paver driveways, fencing, and irrigation. Those line items get reclassified into 5, 7, and 15-year property — and most are eligible for bonus depreciation in the year placed in service.

The result for a typical Orlando-area rental: a first-year deduction five to nine times larger than straight-line depreciation alone, often enough to wipe out the rental's taxable income for several years and create paper losses that offset other passive income.

Property types we see strong results on in Central Florida.

Short-term & vacation rentals

Long-term rentals

Single-family rentals

Multifamily & duplex

A realistic Orlando example

$475k single-family rental near Lake Nona.

A typical scenario for a long-term rental with a 2018-or-newer construction profile. Numbers are illustrative — your calculator output will be tailored to your basis.

Purchase price

$475,000

Depreciable basis

$380,000

Reclassified to 5/7/15-yr

~$110,200

Estimated year-one accelerated deduction

$110,200

vs. ~$13,800 under straight-line — an 8x first-year increase.

FAQ

Cost segregation, plainly explained.

What is a cost segregation study?

An IRS-recognized engineering analysis that breaks a building down into its components and reclassifies them from 27.5-year (residential) or 39-year (commercial) straight-line depreciation into 5, 7, and 15-year accelerated buckets. The shorter recovery periods front-load deductions and free up cash in the earliest years of ownership.

Does cost segregation make sense for an Orlando rental property?

For most owners with a depreciable basis above roughly $200,000, yes. Orlando's mix of newer construction, vacation rentals, and multifamily product is well-suited to segregation because so much of the basis sits in interior finishes, pool and lanai improvements, landscaping, signage, and dedicated electrical — all of which can move into shorter-life buckets.

Can I do a study on a property I already own?

Yes. The IRS allows a "look-back" or "catch-up" study via Form 3115. You claim every missed dollar of accelerated depreciation in the current tax year without amending prior returns. This is often the single largest one-time deduction a real estate investor will ever take.

How does bonus depreciation interact with the calculator estimate?

Components reclassified into 5, 7, or 15-year property are eligible for bonus depreciation in the year placed in service. The calculator estimates use current bonus rates, but your CPA should confirm the rate that applies to your acquisition year.

What does a study cost?

Engineering-based studies for Orlando-area residential rentals typically run $1,500–$5,000. Larger commercial and multifamily projects scale from there. The first-year tax savings almost always exceed the study fee by a multiple of 10x or more.

Will cost segregation trigger an audit?

No. A properly documented engineering-based study using IRS-approved methodology is the audit defense. The accompanying report is built to satisfy the same standards an examiner would apply.

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Cost segregation calculator estimates are illustrative only. Always confirm results with a licensed CPA familiar with your tax situation.