A 13-point program for improving your bottom line.

• Author: Funk, Bryan
• Position: Real estate

If you own real estate, run a company, or manage a firm's assets, you understand the importance of bottom-line thinking. But do you know how to both reduce costs and improve facilities performance? The following plan has helped many firms and entrepreneurs to lower expenses and increase their profit potential.

Reduce Property Taxes:

The question of property value vs. assessed value can be a significant tax issue. In fact, the relationship between real estate value and business value is one of the biggest property tax issues companies face. This distinction often offers ammunition for owners to appeal property assessments. Many investors believe that they don't have control over property taxes; and yet the facts show that most property tax appeals are resolved favorably for the owner. When property taxes are protested, it is not unusual to see reductions in the range of 20 to 40 percent.

Use Tax-Efficient Entity Selection:

What type of business entity is truly best? Should you operate as a corporation (an S corporation or a C corporation), a general partnership, a limited partnership, a limited-liability corporation--or some combination of several of these? CPAs and consultants can analyze which entity will be the most tax-efficient vehicle. One recent engagement restructured a real estate investment entity and successfully eliminated $250,000 of state income tax. Wise counsel regarding entity selection can also help by providing an asset protection framework.

Employ Tax-Efficient Accounting Methods:

Many companies are unaware of the most tax-efficient accounting methods. As a consequence, they may not be maximizing cash flow. Be sure that your accounting team and their consultants regularly review the latest accounting regulations and strategies so that their efforts are giving you the absolutely best tax savings.

Take Advantage of Rehabilitation Credits:

The rehabilitation credit applies to costs incurred for rehabilitation and reconstruction of certain buildings. It does not include enlargement or new construction. If a building was placed in service prior to 1936, it may not qualify as an historic structure, but is potentially eligible for rehabilitation investment credits. A rehabilitation credit equals 10 percent of qualified rehabilitation expenditures (20 percent for historic facilities). And, rehab credits may also be available to lessees for qualified expenditures that they incur.

Invest in Communitites:

Investing in a community...