Self-storage businesses: Hedge against tax payments?

I heard the other day that the main purpose of having a self-storage business is that it’s a great (illegal) way to protect yourself from paying taxes? This makes sense too because most of them that I see offer really good deals, like the first month free, then only about $30/month etc. And they seem to be popping up every where

I don’t know much about this topic… does anyone else know?


We have to pay taxes on our income just like everyone else. The reason why we sometimes give the 1st month free is to get people into the unit because 8 out of 10 times the person will continue to rent the unit, and $30 per month is better than $0 per month on a unit. Also, many areas of the US (Just Like NJ) local governments are starting to want state and local taxes paid for Storage Income.

They are popping up because the need for personal storage is growing. Almost everyone in America is sentimental when it comes to what they have. Personally I find it hard to get rid of many things that many other people would consider junk, therefor I use space at one of my facilities to store it in. I am a true Pack-Rat :anon

Richard Stephens

Storage facilities are best known for their cash flow capabilities and controlled overhead/operating expenses—I can’t speak to tax avoidance or evasion…

As the other poster alluded to, due to the transient nature of your society, storage facilities fill a short term need in the moving process. A less meaningful driver for this type of business, but worth mentioning anyway is the “pack rat” trend (where people use storage facilities as an extension of thier attic or basement—rather then get rid of stuff, they store it).


Scott Miller

I’ve spoken to a few storage unit owners over the past couple of years. One guy was the manager of the second large storage unit facility in my state. I think it was 1,200 units on one single property (can’t completely remember the number). The manager lived with his family in a house right in gates of the storage facility. Most of the people I’ve spoken seem to only run a 75-85% occupancy rate. So it make sense for them to offer the first month free. I run my rental properties at a 100% year round occupancy rate. They aren’t offering first month free deals to get tax right offs, they are ONLY doing it to fill units.

Tax right offs mean nothing compared to profit. Profit is what feeds your family, not right offs. I look for money makers, not right off deals.