Scoring BIG on Self-Storage Door Replacements With Cost Segregation
It’s no surprise that customers are more attracted to well-maintained facilities that look new and pretty… let’s face it, looks really do matter. But looks aren’t the only thing to consider when thinking about door replacements. Newer doors also provide a safer environment so you don’t have to worry about tenants struggling with doors that are hard to open and close or worse, having a door fall on someone and putting you at risk of a lawsuit.
So why are more facility owners not replacing old, worn out doors? The answer is simple… cost. If only there were a way to save money when undergoing a renovation project such as this. Well, actually there is and that’s where cost segregation comes into play.
What Is Cost Segregation?
Cost segregation is a smart tax strategy that accelerates depreciation and reduces the amount of taxes owed. This method allows parts of your building to be depreciated on a 5, 7 or 15 year schedule instead of depreciating the whole building at 27.5 or 39 years with the straight-line method. Cost segregation will help you find additional deductions through renovations and write-offs, including installed doors. By choosing the right depreciation method, you could save up to $100,000 for every $1 million in building costs within the first five years of ownership. Faster depreciation means more cash for you to reinvest back into your business, purchase property for expanded operations, or maybe buy a boat... it’s your money, spend it how you like!
Door Replacements AND Cost Savings? Yes Please.
When replacing your outdated doors, not only are you upgrading your self-storage facility but you could also be putting money back into your pocket. The doors on a self-storage facility tend to take on a great amount of wear and tear and are usually one of the most common items that need replacing. With partial asset disposition, when a renovation takes place, the value of components disposed of during the course of the renovation is identified. This value can then be taken as a loss. What this basically means is when you take and throw your old doors away after replacing them, you can write off the remaining basis that has not already been depreciated.
Completing a self-storage door replacement will ensure a safer environment for your tenants and provide peace of mind that their valuables are taken care of. With newer, safer, and more secure doors, you not only reap savings through cost segregation, but you can charge more for unit rentals as well – it’s a win-win.