Why Are People Renting Out A Storage Garage?
If you do a little research in your area, you might be surprised to find out you could be renting out your garage for extra cash flow. Garage rentals are pretty well known to experienced landlords, but if you’re just starting out or haven’t been exposed to this before it can be quite an eye opener.
All over the world you’re finding rental storage places popping up. It’s become so popular there are now dedicated “reality shows” that walk through the lives of people who buy storage lockers and sell the items that are left behind for profit.
More and more people just need a place to put stuff and that’s why the popularity of these places has grown. We are a society of collectors and we seem to need more and more doodads to keep up with the Jones’s. That stuff needs to go somewhere and a nearby garage may be the solution.
People pay for convenience and if you have an empty garage they can rent that’s just around the corner or even the next neighborhood over, it’s far more convenient than tracking down one of these storage places that may not be as handy. And when you compare square footage, they can be a huge bargain.
But that’s not the only reason people are interested in renting garages.
People also have hobbies. Hobbies that take up a lot of space.
Woodworkers have drills, presses, lathes, saws and more. Mechanics and weekend mechanics have tools and compressors and vehicles and parts and they too need places to leave them.
Small business owners like plumbers, repair people and handy men all need to store supplies, tools and more somewhere and retail space is crazy expensive while commercial space requires huge commitments and also huge expenses.
These are just a few of the types of people that require space. Space that you can rent out for a tidy little additional revenue stream if you just happen to have a detached garage at your rental property.
When Renting Out a Storage Garage, Detached Is The Key
When you are renting out your garage, detached is the key word here. This is not something you want to do with an attached garage as trying that can open up a whole world of problems.
From noise to security issues to safety issues, it’s just not a road you typically want to travel down and it’s why I like older rental neighborhoods as they tend to have detached garages which are perfect for my rental property wish lists.
What Does A Storage Garage Rent For?
The amount you can charge for garage space can vary depending on many factors ranging from size to access to heating to having manual or powered doors to where it’s located.
I’ve rented single car dirt floors garages for as little as $125 per month and I have oversized two car garages that are heated that I’ve been able to get $350 per month for and on the very simple end I’ve even rented dirt or concrete parking pads (no roof or any structure, just the parking space) just for someone to store a vehicle on for $25-$50 a month.
With the low end parking space only that is still an additional $300 income a year that I didn’t have before and for the big garage at $350 per month that ends up being over $4,000 in additional income every year!!
There is no guarantee you will see these same rates in your area, they could be lower, but they may also be higher and of course there is a chance it may not even be done in your area, but if you could, wouldn’t an extra few dollars in your pocket help?
Renting Out Your Storage Garage – Is It Legal?
This might be your most important consideration.
Just because I can rent out a garage here, doesn’t necessarily mean it’s legal where your property is located. So you need to do some homework. And the easiest way to start is to check local ads to see if anyone in the area is renting garages.
You can use Craigslist, Kijiji or the local online sites to start. There are usually local Penny Saver magazines or daily papers that you can also look through to see if you find ads for storage spaces or garages in.
If you find them, it’s a good sign, but your work isn’t done yet, if you don’t it may not mean it’s not possible, it may just not be common practice.
What you really want to learn as you do your research is what laws cover the renting of a garage or storage space. They typically fall outside the jurisdiction of Landlord and Tenant laws, but you need to verify that. Locally for us, renting a garage is the equivalent of renting a warehouse space and the rules are very much in my favor when it comes to payment issues or other problems.
Determining the full legality of it may start with your local Landlord and Tenant services hotline, but it may require you contacting a lawyer who understands local Real Estate law to get the real answers and access to proper leases allowing you to rent your garage out safely and legally.
Heated Garages – Who Pays Utilities
This seems to be one of the big questions that pop up when renting out a garage to someone, especially when the utilities are paid by the tenants renting the house.
Fortunately garages typically don’t use up a ton of utilities. You can typically appease the tenants renting the property by telling them up front when they first are considering renting your property that they are getting a discount on the rent of $XX to cover the utilities used by the garage tenant.
I would typically position this in the $25 to $50 range and if you’re in warmer climates where heating isn’t an issue and electricity is the only consideration it may be less, considerably less to the point it may not even be an issue.
Which brings me to the other common question.
Doesn’t The Tenant Renting The House Get The Garage Automatically?
To put it succinctly, NO!
Now I have had tenants rent the garage from me as well as their suite, but it’s not my preferred way to rent it out. the issue being if the tenant leaves I lose two streams of income at the same time, Now if it’s a $25 parking space it may not be that bad, but if it’s a $350 monthly garage payment plus a $1,000 rent payment, that can hurt a bit more.
So you need to be clear and up front with the tenants who are looking at the rental space to live in that the garage is not included.
Professional Landlord Tip About A Storage Garage
So here’s a little tip for you if you start collecting many properties with garages. After a while, to run your landlord business you start finding your garage starts to fill up with parts and pieces to run your properties.
From light bulbs you purchase in bulk to furnace filters, they all start taking up space. At a certain point that space may start compromising the space you have for storage at home. So why not rent one of the garage spaces to yourself? (check with your accountant to see what you can and cannot get away with in your area as this may be a free rental or you could use it as a potential tax deduction in some cases).
I personally have a two car heated garage at one of my rental properties that is filled with shelves and all kinds of parts ( too many parts actually), tools and general landlord pieces that I need on a weekly, monthly or annual 
basis. We store extra furniture there (for our furnished weekly rental properties), renovation materials, and just about everything my wife doesn’t want in “her” garage at our home.
So there’s your primer on garage rentals. So my question for you, is it something you can start applying to your landlord business in the future, or are you already doing it? It’s not going to work everywhere, but if you can make it work it can definitely help you increase cash flow, so I’d love to hear your thoughts in the comments below.
If you enjoyed this article about garages, you might want to check out my Ask the Landlord Article – Marketing Your Rental Garage for ideas on where and how to find tenants – Bill
My landlord is renting out a small storage unit in my backyard. People from the public as well as the landlord and various repair people have access to it and can enter my yard without giving notice. I live in a high crime neighborhood on a busy street. It’s the kind of street where people regularly go through our trash, sleep on the streets, etc. We were burglarized earlier this year. This situation makes me nervous and I am wondering if it is legal. When I asked the landlord about it she posted and mailed three intimidating notices stating that she has access to the storage units as well as the people renting them.
Hi anonymous,
There seems to be various different rules on how and what can be rented in various areas. You can typically check with the local municipal government to determine where this might fit, but there is a caveat.
If it is illegal to rent in the area it may trigger the landlord who is already breaking the rules to potentially evict you for some real or imaginary reason, so tread lightly. Also, there is a chance the rental itself may be illegal or not up to code, opening the door for one inspection could lead to you having to move as well.
Bill
I found this article to reflect a totally new market that is upcoming. It is becoming more of the norm to Rent out your garage. I saw you touched up on the legality of it and you are right it does depend on what you are renting it out for. I think it really does come down to WHAT you are renting it out for. Is the place set up for a human to live there?
I think everyone can go a different route and rent their garage out, but not for human occupancy. Why not rent it out as Storage such as allowing someone to use it as a place to store their car for the colder months?
This specific article talks about it actually. It is called Rent My Garage.
http://hopperstock.com/2016/10/23/rent-my-garage/
Garage rentals for vehicles can be huge, but don’t limit yourself. There are also many other needs for the extra storage for so many people!
Bill
I have a garage that I rent out to this guy I can’t find any bylaws of how to evict someone. I gave him a notice to move out and he refuses too. When I changed locks he found another way in. The law says civil matter. I was told I can’t remove his stuff or store it and then charge him back fees. I’m trying to fix it and reals rent it. What can I do.
Hi Bill,
What city/area are you in? Each area seems to legislate it differently and almost all tenancy/landlord situations are deemed civil issues but most areas have special setups for the actual tenancy issues.
With garages you may fit under special areas like warehouse leases (it depends also on your lease) or contract law (depending on your area and which also comes full circle back to your lease).
You may need to consult with a lawyer, you can try some local Google searches, you can contact local landlord tenant groups or associations to see if they can guide you and you may be able to look up some local ads for other rented garages and then contact those landlords to ask if they have ever had similar issues.
I likely won’t know the specific rules for your area, but one of those suggestions could point you in the right direction.
Regards,
Bill
Anderson ca.
Shasta co
I live in Lakewood, CA which is in Los Angeles County. When we signed the lease for our single family home in January 2016, the verbal agreement was that the detached garage would be available for our use no later than July. It is now August and the landlord is still moving items out of the garage. She claims it will be ready for our use and has now written up an agreement that includes a fee for the garage which was never discussed. In addition, she will be keeping items in there that she did not feel like moving out. My question is should we have to pay for a garage that she’ll be storing items in as well? Shouldn’t the garage be free for our use if she’s still using it for storage. I’m already upset about the misleading terms back in January because we would not have rented this house if the garage wasn’t going to be included. We felt we were being generous by allowing her time to clean it out in the first place. However, I don’t think we should have to pay money for a garage she is still using. Any thoughts?
Hi Jessica,
What are the specific rules for garage rentals in Lakewood California?
Does it fall under warehouse rules, contract law, residential tenancy acts?
Was the rental misrepresented?
Any and all of these factors need to be looked at and I simply have no idea about the rental rules in Lakewood California.
My opinion, if it matters is no, you shouldn’t have to pay money for a garage that you are renting and expecting to get all of, yet are only getting a portion of.
Bill
Hi
I am a uni student, I and my friend are currently renting a room from a landlord. This room is transformed from a garage and has a bathroom, a simple kitchen, and two bedrooms. We signed a contract about the lease, but now the landlord prohibits us from using the air condition in the room as well as a heater. We cannot stand the cold weather due to health conditions and wants to end the lease relationship. I just want to know i) is this transform and renting event legal (we are in South Australia)? ii) Do we have the right to end the contract due to the bad living condition (i.e. what’s the legally binding force of the contract)?
Thanks a lot!!!!!!!
Hi Sa Li,
The respective rules for what is and what is not allowed vary so much from area to area I can’t provide a specific answer for your situation. It may or may not even be legal for the landlord to rent out a garage space as a room and this might be the first place to do some research.
Typically there are local or regional government landlord tenant organizations that can answer your questions and I’d contact the local government services to see if they can guide you. Again, depending on the local rules this contract may end up being illegal or not binding, but you’ll need to dig a bit to find out exactly.
Bill
Thanks~ I will contact the local landlord tenant organisation for some help. 🙂
Hi,
My parents have been renting our garage for a while. Truth is, we’re not sure if it’s legal. Our tenants have been very uncooperative and are lying, kicking our dogs, messing with electricity, and have been paying their rent late.
I’m afraid they may try to sue us or do something if we tell them to move out. Do we have rights? Is there a way we can avoid this ?
Hi Silvia,
Even if it’s not legal where you live, you still have some rights. And worst case it simply gets shut down and they have to get out.
Keys for you going forward will be to start checking with bylaw, and local town/city authorities about legalities of garage rentals and trying to determine what rules or laws they fit under.
In most municipalities they are outside Residential Tenancy laws and fit under bylaws somewhere and may even have a special category. Most garage leases are warehouse style leases and often allow landlords to simply padlock the door if the tenant doesn’t pay, but again, you need to determine what you can do in your area and this may be partially dictated by your lease you have with your tenant.
Make sure your parents document all the issues with the tenants in case they do try and come back with some sort of suit, but realistically they probably won’t as they are just trying to bully them now it sounds like.
Bill
Our landlord may be renting the garage to a third party or for free, not sure, but nonetheless he did not tell us this (we learned on accident). We have dogs that stay in the yard during the day and the garage is smack in our gated yard. Is it legal to not let your tenants know? How do you keep the privacy/safety of your tenants leasing the house secure?
Hi Beth,
It would be good form to inform your tenants, but at this point who is using the garage? If you weren’t using it, it could have been assumed the landlord was using it and would require access or it might be rented out by someone else? Kind of a he said she said, should he have informed you, should you have asked? No right answer as both should have been brought up.
So whether it is legal varies depending on local laws. some places allow it, some do not. If it is right in the middle of the property is there access without going through the yard? Meaning, is there a garage door where they can access without going through the gated section? Some of this can play into it as well.
Privacy of the tenants is and should be a concern, but if someone is renting the garage, it shouldn’t be an issue any more than people walking down the front street can see into the house, but this also depends on layout and access to the building.
Unfortunately you’re caught in a quandary. If you complain to the local authorities and it gets shut down, perhaps the landlord evicts you for a tenant that will pay more and rent the garage separately or doesn’t mind someone renting the garage.Or he has to sell also leaving you looking for a new place.
It really should have come up in conversation when you were looking at the place as to what the status of the garage was going to be, but you’re well past that point now and may have to work with the cards you have been dealt.
Bill
Hi there,
I have a serious question. I live in a garage apartment over 4 garages. My new property owner has started renting out the garages underneath me. I have done my research by flipping my breaker and all of the electricity being used in the garages is going to MY meter which I pay for monthly. I understand this may be minimal, but surely this can’t be legal for him to do that when I’m paying for my electricity and the garage occupant’s as well, right?
Thank you.
Hi KH,
Probably not the best place to be asking this, but here’s some quick feedback. I’d start by talking to the owner, explaining that the electrical is all under your name. They may not be aware, or they may be trying to slide it under the radar.
Depending on their response and where you live you may have options to file for an abatement of rent, you may be able to break any lease in place or there could be other options. You’d have to check local housing authorities for where you’re located to determine the specific rules. This particular site helps landlords (and some tenants) around the world and doesn’t go into specifics as far as local rules go, so anything I tell you that applies where I am, wouldn’t necessarily be the same where you are.
Regrads,
Bill
Should you rent your garage to someone who will be doing mechanic work about 2 times a week? Its a 2 car garage, if so how much should I charge I am renting the entire garage to them. Thanks!
Hi Ellis,
Is it something that can cause damage to your garage, ie oil stains, spills etc? Does he have the necessary insurance, or can you make that a requirement in the lease? Is it legal to operate a small business like this out of a garage? If you can cover this off then why not?
As for cost, if you’re in downtown New York you should be able to get close to $1,000 per month per stall just for parking. If you’re in the suburbs of Houston, you might get $200 total per month. I can’t answer what you can charge for your specific area, you’ll need to do some homework. Check local ads, papers etc to compare what others rent for.
If you’re in a colder climate, heated garages rent for more, if you’re in a hotter climate, air conditioned would rent for more, in either case you need to offset for any additional costs you would incur. In Costa Rica and Ontario electricity rates are extremely high, in other areas, they are considerably lower and have less impact on your bottom line.
Bill
my landlord one bedroom, with kitchen and bathroom. but before I moved in their he said that every thing was legal.and now he says I need to move out because it’s not up to date
Hi Deanna,
You’re renting out a storage garage as a living quarters? As that is what you posted this under.
Most areas this isn’t legal without special zoning, so it may be illegal. You can check with local landlord tenant boards to check.
Bill
I need a garage to rent to restore my classic cars and park my rv.
See, people need this!!
I have a 4 car garage.don’t need are use.wanting to rent out.detached 937’270-7365.thanks
Probably not the best place to try and rent your garage Melissa. If you’re trying to find renters for it, check local places that advertise garages for rent. You can find them buying doing a Google search listing your town or city, so for example “garage for rent Littleton Colorado” and start by advertising in the top spots.
The majority of readers here are other landlords, not folks in need of garage rentals (although I know some of them sublet garages to make money!), in which case you didn’t even mention where the garage is in the world. With readers here from around the globe it might be even more difficult 8′]
Bill
I run a local business of renting out garages id love to speak to you.
Contact me.
Hi Prit,
thanks for contacting me, after emailing back and forth, here’s the info we talked about and a bit more, Tips On Marketing Your Rental Garage.
Bill
Hi Bill,
I have a garage rented to a guy who uses it as a storage for personal items. He hasn’t paid Feb rent yet so far. I want to evict him. Should I go to RTDRS or anywhere else? This is in Alberta.
Thanks!
Lee
Hi Lee,
Garage rentals fall under different legislation typically than normal rental property. You need to look into the local rules regarding this.
Bill
Is it possible to rent a detached garage from a house that is on the market? I rent the 3rd floor of a 3-family house and will be getting a car soon but there aren’t any spaces left. I would have to park on the street but I don’t feel safe leaving my car out. However the house on the corner has a garage behind that sits next to us with the driveway opening toward the same direction as my street. So I wouldn’t have to go even pass the side of their house to park. this garage is literally more convenient to me than my own apts.
I’m looking into calling the realtor but wanted to do a little research first. What would you advise?
Hi Evie, Call away!
It never hurts to ask and it’s quite possible that if the market is very slow the current owner may appreciate a small income to cover things if it takes a while to sell, or the new owner may not even have a vehicle so they may also be interested in renting out the space.
So come up with a reasonable rational reason for them to rent it to you and present it to the Realtor. The only caveat is the Realtor may see it as a situation that makes it harder for him to show or sell it, so make sure you address that with options in case it comes up or in case it sells and they don’t want to rent to you.
Regards,
Bill
Do you have rule of thumb that might be good for establishing fair rent for a garage? If a small 2 br 1 ba house rents for only $850 how much for a detached 2-car garage?
Hi Justin,
There is a classic rule of thumb for pricing just about anything, it’s called “What the market will bear”. If you set the price too high, no one comes looking, if you set it too low, too many people come looking. Finding that sweet spot is part of the game.
In your situation, what are the features of the garage? Is it heated? Does your area need a heated garage? Is it powered? Would a tenant want power? Is it concrete, or dirt floor, or even gravel? Does it have work benches or is it really just best for storage?
Once you narrow this down a bit you can then go online or in your local papers to find what similar garages nearby rent for. If you have some extra features that others don’t like heat, benches or power you may be able to get a bit more. If you don’t, you may get similar rates or even a bit less.
Ideally this isn’t a quick answer. Whenever you’re researching prices for rentals you would want to watch the market for a few months to verify what continues to get advertised month after month (either priced to high or poor condition) and what places disappear quickly (either priced too low, has great features) and then kind of average out the sweet spot in the middle.
Ultimately there is no one size fits all rule of thumb for something like this. A heated garage is a cold climate where space is at a premium may be worth $500 a month to someone in Canada, the same garage in the Souther US in a newer suburb where everyone has garages on their property and no one needs heat may only be worth $100.
Hope that provides some ideas to work with for you,
Bill
Yes,we have been renting it!
Great to hear!
Bill