I’m considering investing in a self storage fund but I’m trying to understand if there will be any tax benefits.
Does this type of investment produce a K1? Does it provide similar tax benefit as a multi family syndication?
Thanks in advance for your thoughts on the topic.
Hey Jeremy, we have a fund in storage. Without knowing the exact situation, it generally produces income and therefore has taxes associated with it. If you’re getting a slice of equity, the depreciation may outweigh the income it produces on a yearly basis but you’ll have to pay it eventually.
@Jeremy Marquez as @Jim Kittridge mentioned above it will depend on how the fund is set up. If you own an equity stake in the properties themselves, then self storage like multifamily, or any other type of real estate investment will provide you with income and depreciation (which can sometimes be enough to wipe out your tax liability)
Hey @Jeremy Marquez . I have invested and managed both multifamily and self-storage investments. Yes, they are similar. You should get a K-1, depreciation, etc. Some self-storage deals have greater depreciation, like one I invested in that is modular construction (these aren't the norm). Good luck!