The successful operation of spin-based data storage devices depends on thermally stable magnetic bits. At the same time, the data-processing speeds required by todays technology necessitate ultrafast switching in storage devices. Achieving both thermal stability and fast switching requires controlling the effective damping in magnetic nanoparticles. By carrying out a surface chemical analysis, we show that through exposure to ambient oxygen during processing, a nanomagnet can develop an antiferromagnetic sidewall oxide layer that has detrimental effects, which include a reduction in the thermal stability at room temperature and anomalously high magnetic damping at low temperatures. The in situ deposition of a thin Al metal layer, oxidized to completion in air, greatly reduces or eliminates these problems. This implies that the effective damping and the thermal stability of a nanomagnet can be tuned, leading to a variety of potential applications in spintronic devices such as spin-torque oscillators and patterned media.