Business Owners: Stop Paying Someone Else’s Mortgage
Tired of paying rent to someone else? What if you could turn that monthly expense into equity—and a major tax write-off? In this episode of the Main Street Business Podcast, Mark J. Kohler and Mat Sorensen unpack three powerful real estate strategies that smart business owners, parents, and adult children are using to build wealth and reduce taxes. Whether you’re renting a storefront, sending kids to college, or planning for aging parents, these concepts will change how you think about real estate.
Watch the full episode of the Main Street Business Podcast for the complete breakdown.
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Strategy #1: Own the Building Your Business Rents
Why pay rent to someone else when you can pay it to yourself? Mark and Mat explain how business owners—from doctors to hairstylists to contractors—can buy their own commercial space and lease it back to their business. “Being your own landlord is one of the most underrated business strategies out there,” said Mat Sorensen. “We’ve done it ourselves and watched our clients benefit from it for decades.”
Benefits:
- Build equity instead of making your landlord rich
- SBA financing options available with as little as 5–10% down
- Commercial space is currently discounted in many markets
- Tax strategy: Use a self-rental structure with a cost segregation study and bonus depreciation for accelerated write-offs—even if you’re not a real estate professional
“We’ve seen clients pay off their buildings in 10–15 years—and we’ve done it ourselves,” says Mat. “That mortgage payment? It’s often no more than what you’re already paying in rent.”
Strategy #2: Buy a Home Where Your Kids Go to College
If you’re helping your kids pay rent during college, you might be missing a golden opportunity. Instead of throwing money at a landlord, consider buying a house in their college town and renting rooms to their friends.
Benefits:
- Offset mortgage with roommate rent
- Teach kids responsibility as a landlord
- Build long-term equity
- Post-graduation options: Keep it as a rental, sell it with a 1031 exchange, or convert it to a short-term rental for visiting parents and alumni
- Tax advantage: Depreciation can offset any rental income and reduce your overall tax burden
One real client example: a couple bought a four-bedroom house near the University of Utah for their daughter. She lived in one room, and rented out the others to classmates — covering almost the entire mortgage. You not only save on rent, you build equity, generate potential cash flow, and open up future options: keep it as a rental, convert it to a short-term rental, or 1031 exchange it into a better long-term property once your child graduates.
Even better? You teach your kids how to manage a property — real-world landlord experience while they’re still in school.
From a tax angle, you’ll benefit from depreciation on the property, and if you qualify as a real estate professional, those deductions may offset other income. It’s a strategy with both immediate and long-term upside.
Strategy #3: Buy Your Parents’ House and Lease It Back
Helping your aging parents doesn’t have to mean draining your savings. Mark and Mat explain how buying your parents’ home—and renting it back to them—can unlock tax, asset protection, and Medicaid planning benefits.
Why This Works:
- Your parents get to stay in their home, often rent-free via annual gift exclusions (up to $19,000/person)
- You gain step-up in basis at purchase, eliminating capital gains for them
- If your parents later need Medicaid, the home won’t count as an asset
- You write off travel, repairs, and depreciation—even if you’re not a real estate pro
- Prevents family disputes by setting up a clear, documented plan
As parents age, many are on fixed incomes, still living in fully paid-off homes, but struggling to cover other expenses. Selling the home to a child can provide them liquidity without tax liability (thanks to the home sale exclusion of up to $500,000 for married couples).
You can then lease the home back to them at market rent, and use annual gift allowances (up to $19,000 per parent, per year, per person) to essentially “gift” them the rent without triggering gift tax issues. That rent? It’s a tax write-off for you. The property? It becomes a rental asset. And when you travel to visit your parents, you’re visiting tenants — potentially writing off related travel expenses.
This move can also shield the home from lawsuits or Medicaid restrictions and preserve family wealth, especially when coordinated with proper estate planning.
“We’ve seen this strategy preserve dignity, create peace of mind, and build wealth — all while keeping families in control,” Mark says.
Why Business Owners Need to Rethink Rent
Across all three strategies, the core lesson is simple: stop making someone else wealthy with your rent payments. Whether it’s your office space, your kid’s apartment, or your parents’ home—owning the real estate can offer control, tax benefits, and long-term wealth.
Whether you’re a business owner renting commercial space, a parent sending your kid to college, or part of the sandwich generation caring for elderly parents — there’s a smarter way to manage rent.
These strategies aren’t reserved for the ultra-wealthy. They’re tools that everyday Americans can use to build wealth and protect their families, especially when backed by a smart tax strategy.
