When starting a property investment business, one of the first steps is to obtain the proper NAICS code for your company. The NAICS (North American Industry Classification System) code is a standard used by federal agencies to classify and track businesses by industry. Selecting the right NAICS code is crucial for property investment companies as it determines your tax obligations, government reporting requirements, eligibility for various programs and more. In this article, we’ll explore common NAICS codes for property investment businesses and how to determine the best fit for your specific business activities.
531110 – Lessors of Residential Buildings and Dwellings
This NAICS code applies to businesses that lease or rent residential properties such as single-family homes, townhomes, duplexes, triplexes, quadruplexes and other multi-unit residential buildings. This includes both furnished and unfurnished rentals on a month-to-month or longer term basis. Businesses that sublease residential properties also fall under this code. So if your core business activity involves owning, managing and renting out residential real estate, 531110 is likely the right NAICS code for your property investment company.
531120 – Lessors of Nonresidential Buildings (except Miniwarehouses)
This code covers businesses that lease or rent nonresidential buildings and properties such as offices, retail stores, industrial buildings, warehouses, distribution facilities etc. It includes buildings rented on a month-to-month or longer term basis but excludes self-storage mini warehouses which fall under NAICS 531130. This NAICS code applies to property investment companies focused on commercial real estate rentals and leasing.
531190 – Lessors of Other Real Estate Property
This code encompasses lessors of other specialized types of real estate not classified elsewhere. Examples include renting or leasing land, manufactured home sites, vacant lots, grazing land, oil and gas fields etc. So if your property investment activities don’t clearly fall under residential or nonresidential building rentals, 531190 may be the appropriate NAICS classification for tax and reporting purposes.
531320 – Offices of Real Estate Appraisers
This NAICS code applies to businesses primarily engaged in appraising real estate, either residential or nonresidential properties. If your property investment company provides valuation and appraisal services for purchase price opinions, mortgage transactions, property tax assessments etc., 531320 would be the suitable NAICS classification.
In summary, identifying the proper NAICS code is an important first step when starting a property investment business. Carefully review your company’s activities to determine if they align with leasing residential properties, nonresidential properties, vacant land or providing real estate appraisal services. Selecting the NAICS code that best reflects your core business will help ensure you meet the right reporting standards and requirements.