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RELATED INFORMATION - SELF STORAGE
Our Involvement in the Self Storage Industry

Relevant Articles:
» Real Estate Investors Benefit from Cost Segregation for Self-Storage
» Cost Segregation -- Isn't my CPA already doing this?
» Why are 90% of Self Storage Owners Overpaying Federal Income Taxes?

Self-Storage Association Membership
» Arizona Self Storage Association
» California Self Storage Association
» Texas Self Storage Association
» Illinois Mini Storage Association

Past Self-Storage Events:
» 2006 Texas Self Storage Association Annual Conference, Galveston, TX
» 2006 Inside Self Storage Conference, Reno, NV
» Self Storage Association Fall Conference & Trade Show, Las Vegas, NV
» California Self Storage Association Second Annual Owner's Finance Summit , Newport Beach, CA
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Information for Self Storage Owners - Oconnor & Associates

Information for Self Storage Owners

Cost Segregation and Self-Storage Properties…Reduce Federal Income Taxes. Increase Operating Capital.

Click here to request a free no-obligation estimate of tax savings for your property.

A typical self-storage unit averages 25% - 35% of its improved value as short-life property, which generates higher annual depreciation and reduces federal income taxes. Cost segregation studies minimize ordinary income to maximize return of capital and/or capital gain related distributions. They also create flexibility to achieve various operational objectives.

Benefits of Cost Segregation
  • Decreases a self-storage facility's income taxes, allowing the owner to invest the savings in capital improvements, reduce debt or simply improve cash flow.
  • Provides immediate reduction in federal income tax through increased depreciation.
  • Defers taxes on gains to a lower rate.
IRS Guided. Cost segregation is a conservative, IRS defined approach implemented by O’Connor & Associates’ professional real estate appraisers to update depreciation schedules for correct component allocation. Utilizing appraisal specialists allows our clients to realize considerable cost efficiencies. Our fees are typically one-half those charged by non-appraisal firms for comparable properties.

How Do We Work With Self-Storage Properties?

After a careful review of your entire property by one of our expert appraisers or cost segregation advisors, we identify the amount of five, seven and 15-year property components you have, apply the various depreciation schedules to each and calculate the new depreciable amounts. Selected components are in accordance with the IRS Audit Techniques Guide. A typical self-storage unit averages 25% - 35% of its improved value as short-life property, which generates higher annual depreciation and reduces federal income taxes.

A list of common short-life items for self storage property as defined by the IRS Audit Techniques Guide include:

5-Year Property 15-Year Property
Removable flooring (vinyl, carpeting, wood) Parking lot/asphalt paving
Selected cabinetry Parking lot striping
Special ventilation Site work
7-Year Property Fencing
Signage Sidewalk concrete
Vinyl/wood wall coverings Landscaping


Actual Self-Storage Savings

Property Location
Improvement Basis
Total Short-Life Property
Short-Life as % of Improvement
CA
$3,258,724
$910,913
28%
TX
$2,410,846
$684,531
28%
CA
$5,147,887
$1,477,259
29%
LA
$1,167,350
$352,190
30%
TX
$1,024,250
$318,371
31%
CA
$1,368,652
$436,046
32%
TX
$1,989,756
$754,325
38%
TX
$2,998,480
$1,381,340
46%


The O'Connor & Associates' Difference
  • Leader in "look back" studies.
    O'Connor & Associates is the industry leader in "look back" studies having done more studies benefiting from Section 481a than any other boutique firm in the nation. Commercial appraisal is a core competency of our firm with extensive expertise in defining property values across dozens of land uses. We can establish and analyze a cost basis, even when such details are not available from original construction documents
  • We don't "over-engineer".
    O'Connor & Associates combines the right balance of tax, accounting, valuation and real estate expertise without "over-engineering" what the IRS requires. This balance is reflected in our solidly competitive fees
  • Fast turnaround.
    O'Connor & Associates’ project turnaround is 4-6 weeks. Under special circumstances, it can be as short as 10 business days. This reflects our flexibility, customer focus and a well-tuned business process for generating cost segregation studies.
  • Use of property appraisal experts.
    O'Connor & Associates streamlined our approach so your team is contacted by only one professional who collects information and coordinates technical requirements related to documentation, site visits, clarifications, etc.
  • The O'Connor & Associates goal is to be upfront, honest and handle our client relationships with the utmost integrity. We know how important that is in today's business environment.
In addition to cost segregation studies, O'Connor & Associates also provides appraisal services for lenders and developers of self-storage facilities and commercial property tax reduction for self-storage owners.

Click here to request a free no-obligation estimate of tax savings for your property.


Corporate Office
2200 North Loop West, Suite 200
Houston, TX 77018
driving directions to all locations
(t) 713.686.9955 / 1.800.856.REAL
(f) 713.686.3377
For general questions not related to property tax, e-mail us.
For property tax questions e-mail the Property Tax Department.
Office Locations
Houston, TX (corporate)
Dallas, TX
San Antonio, TX
Austin, TX
Los Angeles, CA
Services: Cost Segregation | Property Tax | Appraisals | Research & Consulting
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