Bars

What Is FF&E, and Why Does It Matter in Real Estate?

By Matthew Frankel, CFP – Updated Jan 1, 2025 at 10:51 AM EST

Key Points

FF&E includes movable items like furniture and computers, not part of the building structure.
Depreciation for FF&E, like a $1,000 computer, can reduce taxable income over five years.
Understanding FF&E is crucial for accurate business valuations and tax calculations.

FF&E stands for fixtures, furniture, and equipment. These are assets contained inside of a commercial building that are not part of the building itself and are not permanently attached but have tangible value and are used in the day-to-day operations of a business that occupies a commercial building. Office furniture is a common example. (We'll get into more examples of FF&E in a bit.)

There are a few reasons why FF&E is an important concept to know in real estate. For one thing, if you're buying or selling an existing business, the fixtures, furniture, and equipment owned by the business are important components of the business's fair value. The same concept also applies in cases of business liquidation, such as in bankruptcy.

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Tax Deduction

A tax deduction occurs when a certain expense can be used to reduce the amount of your income subject to income taxes.

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst specializing in the real estate and financial sectors. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, Globe St, The National Desk, and other TV networks and publications for his real estate, financial, stock market, and investing expertise.

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