Using (1) residential unit as storage/office in a fourplex

[TJ Moreno]

Fortunate enough to have been able to purchase (4) Fourplexes on (4) Separate lots in a cul-de-sac.  Running into storage issues at home with all the materials it takes to maintain 16 units(tile, rug remants, fixtures, tools etc.) .  I am thinking about using the smallest unit of the 16 and make it a storage/office space so that all materials and tools are on site and do not have to lug back and forth from my home when a unit is empty or when something needs to be fixed.  Also, will provide me with a restroom so that I will not have to run down the nearest fast food joint when I need to go or the wife and kids.  Will also be installing internet on this unit so I can monitor my stuff via my IP Cameras and using the basic services of the unit (gas/electric) as I plan to have a refrigerator there.  Any issues or concerns anyone sees with these expenses being tax deductible or any other issues or concerns.  Property is financed and located in Central California.  Thanks. 

[Ben Leybovich]

At $725/month you'd be loosing $8,700 of revenue plus the utilities that you'll have to pay on the unit - say $11,000/year. Pull a permit a build a nice garage in the back for storage $7,000 or less. 

Understand - by taking $11,000 out of the bottom line, capitalized at 10% you are loosing $110,000 of value. That's just dumb. And if this is a nice location, at 8 CAP you are loosing $137,500. Find a better solution :)