Is Cost Segregation Worth It on a $300,000 Property?

Start With Land, Not the $300,000 Price

The $300,000 figure on a deed or a purchase agreement includes land, and land never depreciates. A property's assessed value, or an appraisal, typically splits the purchase price between land and improvements; a property in a market with modest land costs might carry 80 to 85% of its price in the building, while one in a market with expensive land could carry closer to 60 to 70%.

A property in a lower-cost land market, much of the rural Midwest, for example, might see 85% or more of its price allocated to the building; a property in a high land-value market, coastal areas or dense urban infill, could see land eat closer to 40% of the price.

That split has to happen before any cost segregation math starts, since a study only reclassifies the depreciable building basis, never the land underneath it.

What a Study Typically Reclassifies at This Size

Real delivered studies shift roughly 15 to 35% of building basis into faster schedules, varying by property type. Restaurants and hospitality properties run at the high end of that range; simple shells with minimal site work and finish-out run at the low end. A $300,000 property with, say, a $240,000 building basis and a 20% reclassification rate would move roughly $48,000 into 5-year, 7-year, and 15-year land improvement schedules.

A property with extensive site work, a large parking area, fencing, exterior lighting, tends toward the higher end of that reclassification range even at a modest overall price, since land improvements are their own bonus-eligible bucket separate from the building's structural components.

First-year deductions on commercial property typically run about 16 to 21% of building basis under current bonus depreciation rules, once section 481(a) catch-up or the initial year's accelerated depreciation is included.

Why Property Type Matters More Than the Price Tag

Two $300,000 properties, a plain retail shell and a small restaurant build-out, can produce very different studies even at an identical purchase price. The restaurant carries more 5-year kitchen equipment, decorative finishes, and specialized electrical and plumbing; the retail shell carries less to reclassify. A small medical or dental buildout, another common $300,000-range property, carries more specialized plumbing and electrical than a plain retail shell, which is why property type, not price, is the more useful predictor of what a study will find. A small self-storage facility sits at another point entirely, mostly structural steel and minimal interior finish, which typically pulls its reclassification share toward the lower end of the range.

Working the Fee Side of the Equation

Recent commercial studies have been quoted in the $9,000 to $12,000 range, and a recent single-family rental study was quoted at $1,295. A $300,000 property sits closer to the residential or small-commercial end of that spectrum, where the fee itself tends to scale down with the smaller basis. A $300,000 property's fee is also shaped by how much site work and finish-out there is to document, not by the sale price alone; two properties at an identical price can generate meaningfully different fees if one has far more to classify.

The guarantee gives the break-even logic a floor: our study identifies at least 20x its fee in first-year deductions on commercial property, or at least 30x on a short-term rental, or it is free. Every study at Basis follows this same custom-pricing rule regardless of property size, which is why there is no published rate card for any building.

The Break-Even Math, Worked Through

These are structural ranges built from real delivered studies elsewhere, not a projection for any specific $300,000 property. The building's actual composition, land ratio, age, and finish level are what determine where a specific property lands inside these ranges. A property near either end of these ranges is not unusual; the table exists to show the shape of the math, not to bracket every possible $300,000 building. A newer building with a simple layout tends to sit toward the lower end; an older one with a renovation history tends to sit toward the higher end.

What "Worth It" Actually Means Here

"Worth it" is a ratio question, not a yes-or-no verdict this page can settle for a specific reader. It compares the study's fee against the deduction it is likely to identify, and separately, whether the owner's own tax situation, passive activity status, other income, and timeline, can actually use that deduction this year or has to bank it. Both halves matter; a large deduction that suspends as a passive loss is still valuable, just on a different timeline. Treating "worth it" as a single yes-or-no question skips the step that actually decides the answer for a given owner: what happens to the deduction after it is identified.

See cost segregation and passive income for what happens to a deduction that cannot offset wages this year.

Getting the Real Number Instead of the Range

Every figure above is a structural range, not a quote. A free Preliminary Benefit Estimate replaces the range with a modeled number for a specific $300,000 property, land ratio and building composition included, before any fee is quoted. That estimate is also the only way to know, for a specific property, whether it lands nearer the top or bottom of the structural ranges laid out above.

See is cost segregation worth it on a $500k property for how the same math shifts at a larger basis, and is there a minimum property value for cost segregation for the smaller end of the range.

Frequently asked questions

Does the land-to-building ratio vary a lot by location?

Yes. Land value as a share of total price differs widely by market, density, and local assessment practices. A property in an area with high land costs will have a smaller depreciable building basis than an identically priced property where land is cheap, which changes the deduction a study can identify.

Is a 20x deduction-to-fee ratio realistic on a $300,000 commercial property?

The guarantee sets that as a floor for commercial property: our study identifies at least 20x its fee in first-year deductions, or it is free. Whether a specific $300,000 property lands at the floor or well above it depends on its building basis and composition, which a free estimate can model.

Does a $300,000 property qualify for the same bonus depreciation rules as a larger building?

Yes. Bonus depreciation under section 168(k) applies based on the property class the study identifies, not the building's overall price. A $300,000 property's 5-year, 7-year, and 15-year components are just as bonus-eligible as those on a much larger building.

Should the study happen before or after closing on a $300,000 property?

Cost segregation applies to purchases, new construction, and renovations, and can be commissioned after closing. A free Preliminary Benefit Estimate can also be run before closing, using the expected purchase price and property details, to help size the likely deduction as part of the purchase decision.