Self storage properties, can also have major differences when it comes to which assets can depreciated faster. For example, climate control systems depreciate faster, larger asphalt surfaces depreciate faster, etc. On average you can expect around 25% of the property can be reallocated to faster depreciation, however we have seen up to 40%.
Based on our first 6 value-add deals and with taking the bonus depreciation in year 1, we have seen anywhere from 0.95%-1.93% in the subsequent years.
Without taking bonus depreciation, the studies indicated that the annual depreciation amounts could be anywhere between 1.67%-2.56%.
Want more information on Depreciation through Cost Segregation? Listen to the AJ Osborne Podcast - Episode 125 - The Best Real Estate Investment Tool - with Yonah Weiss, Cost Segregation Expert.