Storage Facility
Project Overview
The self-storage facility in Columbus sits on a 2-acre lot and was built in 1985. This property is zoned B3 (Commercial/Industrial) and features over 100 rentable units, along with a rentable warehouse and parking spaces. The storage facility offers various unit sizes, ranging from 5 x 10 up to 10 x 20, in addition to car and truck parking. For those considering a cost segregation study, the site includes a rentable warehouse equipped with electricity, lighting, and running water. Additionally, the property has two bathrooms, providing convenience for all users and potential tax savings.
The cost segregation study conducted by Taxero Cost Segregation identified $1,403,836 in assets eligible for accelerated depreciation through 5 and 15-year property reclassifications. This resulted in significant tax savings of $415,535 in the first year, primarily due to 80% bonus depreciation. The effects of this study extend beyond just the initial year, delivering tax benefits amounting to $1,314,748 over 15 years. When these savings are reinvested, they empower multi-family investors to acquire additional properties more swiftly, thereby enhancing their returns. This clearly illustrates the immense value of cost segregation studies for multi-family and real estate investors, particularly those managing storage facilities.
The total yield on depreciable first-year assets achieved through this cost segregation study was 35.5%, which is a very satisfactory result. This impressive outcome is attributed to the reallocation of 5-year and 15-year assets, ultimately contributing to significant tax savings for the storage facility.
The chart clearly illustrates how a cost segregation study enhances depreciation acceleration during the early years of ownership—showing significantly higher first-year and front-loaded deductions when compared to the standard 27.5- or 39-year straight-line method. This visual highlights increased early cash flow, improved tax efficiency, and the ability to unlock hidden value within a storage facility. It serves as an excellent demonstration of the immediate financial impact of a cost segregation study at a glance, showcasing substantial tax savings.