| Cost Segregation and Self-Storage Properties...Reduce | | | | 28% |
| Federal Income Taxes. Increase Operating Capital. | | | | CA |
| A typical self-storage unit averages 25% - 35% of its | | | | $5,147,887 |
| improved value as short-life property, which generates | | | | $1,477,259 |
| higher annual depreciation and reduces federal income | | | | 29% |
| taxes. Cost segregation studies minimize ordinary | | | | LA |
| income to maximize return of capital and/or capital | | | | $1,167,350 |
| gain related distributions. They also create flexibility to | | | | $352,190 |
| achieve various operational objectives. | | | | 30% |
| | | | TX |
| Benefits of Cost Segregation | | | | $1,024,250 |
| - Decreases a self-storage facility's income taxes, | | | | $318,371 |
| allowing the owner to invest the savings in capital | | | | 31% |
| improvements, reduce debt or simply improve cash | | | | CA |
| flow. | | | | $1,368,652 |
| - Provides immediate reduction in federal income tax | | | | $436,046 |
| through increased depreciation. | | | | 32% |
| - Defers taxes on gains to a lower rate. Cost | | | | TX |
| segregation changes the character of income based | | | | $1,989,756 |
| upon the nature of short life property (it physically | | | | $754,325 |
| depreciates) and the mechanics of reporting a sale. | | | | 38% |
| The bulk of the gain upon sale is typically allocated to | | | | TX |
| land and long-life property.IRS Guided. Cost | | | | $2,998,480 |
| segregation is a conservative, IRS defined approach | | | | $1,381,340 |
| implemented by O'Connor & Associates' professional | | | | 46% |
| real estate appraisers to update depreciation | | | | The O'Connor & Associates' Difference |
| schedules for correct component allocation. Utilizing | | | | - Leader in "look back" studies. |
| appraisal specialists allows our clients to realize | | | | O'Connor & Associates is the industry leader in "look |
| considerable cost efficiencies. Our fees are typically | | | | back" studies having done more studies benefiting |
| one-half those charged by non-appraisal firms for | | | | from Section 481a than any other boutique firm in the |
| comparable properties. | | | | nation. Commercial appraisal is a core competency of |
| How Do We Work With Self-Storage Properties? | | | | our firm with extensive expertise in defining property |
| After a careful review of your entire property by one | | | | values across dozens of land uses. We can establish |
| of our expert appraisers or cost segregation advisors, | | | | and analyze a cost basis, even when such details are |
| we identify the amount of five, seven and 15-year | | | | not available from original construction documents |
| property components you have, apply the various | | | | - We don't "over-engineer". |
| depreciation schedules to each and calculate the new | | | | O'Connor & Associates combines the right balance of |
| depreciable amounts. Selected components are in | | | | tax, accounting, valuation and real estate expertise |
| accordance with the IRS Audit Techniques Guide. A | | | | without "over-engineering" what the IRS requires. This |
| typical self-storage unit averages 25% - | | | | balance is reflected in our solidly competitive fees |
| 35%Â of its improved value as short-life | | | | - Fast turnaround. |
| property, which generates higher annual depreciation | | | | O'Connor & Associates' project turnaround is 4-6 |
| and reduces federal income taxes. Depending on the | | | | weeks. Under special circumstances, it can be as short |
| size of the property and when it was acquired or built, | | | | as 10 business days. This reflects our flexibility, |
| year one tax savings can be substantial. For a | | | | customer focus and a well-tuned business process for |
| property with a cost basis of $2,000,000, it would not | | | | generating cost segregation studies. |
| be unusual to see cost savings of $30,000-50,000 in | | | | - Use of property appraisal experts. |
| the first year. | | | | O'Connor & Associates streamlined our approach so |
| A list of common short-life items for self storage | | | | your team is contacted by only one professional who |
| property as defined by the IRS Audit Techniques | | | | collects information and coordinates technical |
| Guide include: | | | | requirements related to documentation, site visits, |
| 5-Year Property | | | | clarifications, etc. |
| 15-Year Property | | | | - The O'Connor & Associates goal is to be upfront, |
| Removable flooring (vinyl, carpeting, wood) | | | | honest and handle our client relationships with the |
| Parking lot/asphalt paving | | | | utmost integrity. We know how important that is in |
| Selected cabinetry | | | | today's business environment. In addition to cost |
| Parking lot striping | | | | segregation studies, O'Connor & Associates also |
| Special ventilation | | | | provides appraisal services for lenders and developers |
| Site work | | | | of self-storage facilities and commercial property tax |
| 7-Year Property | | | | reduction for self-storage owners. |
| Fencing | | | | Click here to request a free no-obligation estimate of |
| Signage | | | | tax savings for your property. |
| Sidewalk concrete | | | | O'Connor & Associates is a national provider of |
| Vinyl/wood wall coverings | | | | investment property consulting services including cost |
| Landscaping | | | | segregation studies, due diligence, lease abstraction, |
| Actual Self-Storage Savings | | | | tax deduction, feasibility studies, tax reduction, lease |
| Property Location | | | | audits, partial interest valuations, real estate consulting, |
| Improvement Basis | | | | commercial real estate appraisals and gift tax |
| Total Short-Life Property | | | | valuations. |
| Short-Life as % of Improvement | | | | Our appraisers are competent to appraise virtually all |
| CA | | | | types of property including land, neighborhood shopping |
| $3,258,724 | | | | centers, warehouses, bowling alleys, motels, mobile |
| $910,913 | | | | home parks, self-storage units, retirement homes, |
| 28% | | | | multifamily housing, movie theatres, veterinary clinics, |
| TX | | | | single-tenant retail centers, funeral homes, bars, |
| $2,410,846 | | | | amusement parks, hospitals, schools, night clubs, |
| $684,531 | | | | apartments and medical facilities. |