As you approach the end of the year, it’s natural to take a closer look at how your commercial real estate portfolio has performed. This is also a great time to get organized, review your financial records, and prepare for conversations with your tax and financial professionals.
With higher interest rates, increased operating expenses, and ongoing economic shifts, staying proactive can help you start the new year with confidence. Whether you recently completed an improvement project or added a new property to your portfolio, taking stock now can help make your planning smoother in the months ahead.
Below are several general areas you may want to review, along with topics you might bring to your CPA or adviser.
*These are not financial or tax recommendations.
Understanding the Market Context
If rising expenses or borrowing costs affected your cash flow this year, you’re not alone. Many investors are feeling the impact.
Year-end is a useful time to look at how your operating expenses, loan terms, and property performance lined up with expectations. This review gives you a clearer picture of what you may want to discuss with your tax professional and helps you prepare for decisions in the coming year.
Reviewing Depreciation and Property Improvements
Depreciation plays a major role in how commercial real estate is accounted for, and it’s worth taking a moment each year to make sure your records reflect any changes.
You might consider reviewing:
- Recent improvements or renovations that could affect your depreciation schedule
- Whether a cost segregation study is something to discuss with your CPA
- Whether any removed or replaced components should be documented
Because depreciation rules vary based on individual circumstances, these are great questions to bring to your tax professional so they can guide you based on your specific situation.
Organizing Interest and Operating Expenses
With today’s higher interest rates, your financing costs may play a larger role in your overall returns. Year-end is a good moment to make sure everything is clearly documented.
You may want to take inventory of:
- Interest paid on loans used for acquiring or improving properties
- Operating expenses such as repairs, utilities, property taxes, and management fees
- Any supporting records your CPA may need for accurate reporting
Thorough documentation now helps simplify your tax preparation later.
If You Bought or Sold Property This Year
If you completed a purchase or sale in 2025, organizing your records early can save time when tax season arrives.
You may want to speak with your professional adviser about:
- How long you held a property and how that affects your reporting
- How gains or losses will be categorized
- Whether any tax-deferral tools might be relevant for your situation
Since each transaction is unique, your CPA can help you understand what applies to you.
Thinking Ahead About Financing Decisions
Your financing structure plays a significant role in your portfolio’s long-term performance. As you plan for the coming year, you may want to consider:
- Whether refinancing supports your goals
- Whether accessing capital for improvements aligns with your strategy
- How changes in loan terms may affect your cash flow
At ReProp Financial, we work with many investors who review these topics at year-end. While we don’t provide tax advice, we help borrowers evaluate financing options that complement their overall plans.
A Proactive Approach to a Stronger New Year
Taking time now to review your financials, organize your documentation, and prepare questions for your tax and financial advisers can put you in a strong position heading into the new year.
If you’re considering adjustments to your financing, or looking ahead to new investments, ReProp Financial offers flexible commercial real estate lending solutions backed by decades of experience.
We’re here to help you align your financing needs with your vision for the year ahead.
