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Quick Advice on Becoming A Landlord

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Become A Successful Landlord By Looking Ahead

advice on becoming a landlordI constantly run into people looking for advice on becoming a landlord and the challenge is they want to be successful at it immediately.

But they can’t, because being a successful landlord requires a long term vision and a long term strategy where you’re planning today for tomorrow. And tomorrow is years down the road!

The majority of the time that property you bought last year really won’t start making money for you for five to seven years, so you need patience.

I’m sure many of the readers are a bit confused right now by the five to seven year comment so let me explain what I mean.

During the first several years you own a property, even with good cashflow, you’re really treading water. The problem is if  you needed to liquidate your property in those first five years, in most markets you’ll simply break even.

Even if the property has gone up a few percent in value after paying Realtor fees, legal fees, and penalties or additional costs associated with the mortgage you often only end up with a little bit of money left over. We’re talking less than $10,000 in normal markets.

Over five years that works out to only a couple grand a year and I’m sure the time and energy you put in over five years was worth more than $2,000 a year.

Long Term Success

Fortunately somewhere around that five year mark the pendulum starts to swing over to your favor. You’ve reached a break even point and now any appreciation starts working in your favor and doesn’t simply go to Realtors and fees.

Also your mortgage is moving to a point where less of the payment is going to interest and more of it is going to your principal.

Suddenly, or not so suddenly if you’re not planning long term, in that seven to ten year range many different factors start working towards your benefit.

Rents have started drifting higher over time, values may move up and down but over the long haul tend to migrate upwards and you’re making an even bigger dent in that mortgage.

Now your friends start telling you how lucky you were to invest in Real Estate and you’ve become an overnight success…

They seem to forget the years where you were breaking even and putting in your time to educate yourself, to get the right tenants in place and to make sure your property was well maintained.

You just smile and nod and go yep, lucky.

My Advice On Becoming A Landlord

So what’s my advice on becoming a landlord, or more importantly a successful landlord?

How about, don’t be in a hurry, just buckle in for the long term and continue to educate yourself along the way.

What are your thoughts? Do you agree, or disagree? Leave a comment, share with other landlords and let’s hear what people think.

 

I’m Just Your Typical Landlord Hypocrite

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This is probably where I need to say, do what the landlord says, not what he does!

I have to confess, I’m breaking my own rules. Now I guess in the big picture that’s not a huge issue, but when it comes to a tenant owing me a ton of money and me suddenly finding myself sucked into the Eviction Spiral, it gets a bit serious.

After all, I’m supposed to be the expert, yet I’m making the same mistake I tell you not too and I guess I better tell the entire tale. So let me take you down the garden path….

Landlord story, down the garden path with a tenant

 

This actually dates all the way back to December with one of my weekly rental tenants. He’s a very clean neat individual, but a) he doesn’t speak very much english and b) he owes me money.

As we zip back a few months to the beginning of December as typically happens to many of my rooming house tenants they vacate around mid month and head back to where their families are located. It’s typical as many of the construction projects close down early before Christmas and many of the workers get to enjoy a two or three week break and trades folks are who I cater too.

So this is something I tend to see every year, then in January they start coming back, rooms fill up and it’s business as usual. Now my nice clean non-english speaking fellow named Michel had no one to go home to. No family around, nothing, so he intended to stay at my property over the break. the only issue being, he had no income coming in to pay for the room. (This is where the hypocrite part comes into play!)

As I weigh my options I have a few things to consider a) he’s a good guy, b) he’s been good about paying in his past history and c) I have a bunch of vacancies anyway and if I kick him out or he leaves I still won’t be collecting rent for that room and I don’t know what the next guy will be like and how many weeks before there could be a next guy.

So I did the easy thing, I let him stay.

Fast Forward to January

calendarI just happen to live in an oil based economy region so as January rolls around many of the projects have moved to a hold status due to the uncertainty of oil prices and the viability of some of these projects going forward if oil stays low.

Instead of starting work at the beginning of January, it turns into mid January, then late January and finally the beginning of February before he finally lands a job. the good news is, he gets paid a lot per hour, so it own’t take too long to get caught up. (Now I don’t want you to read anything into this, but I’m talking about getting caught up in February and here it is March when I’m writing this…)

Anyway, according to my rules, I should have cut bait and recast already. instead I go with my gut and give him more time. This is the part where YOU need to do what I say and not what I’m currently doing with this guy.

Now Fast Forward to Late February

Now we’re in the last week of February and I get a text update from him (he uses French to English conversion to send me texts, sometimes it is very very confusing). This set of texts though is quite clear. He will have $2,000 for me on Saturday the 28th (yes, I let a weekly tenant rack up an outstanding balance of over $2,000, please find me a wall to bang my head on).

As you can imagine I’m pretty upbeat when I go to meet him Saturday, at least at first.

You see, he lost his bank card and couldn’t withdraw the money.

Is it time to panic yet?

Of course he can’t tell me this due to the lack of conversational English between us, but he has notes that someone obviously wrote out for him in English. So now I’m stuck in a tight spot. It’s the Eviction Spiral I referred to originally.

If I kick him out, I take a huge loss, so I have to take a stand.

His notes tell me he will go to the bank after work Monday get the cash and get a new card and will have the money for me Tuesday night. Experience tells me this is the perfect getaway for him.

If he has $2,000 that is enough for him to get into a new rental place, with the 1st being the next day, it’s an optimum time for him to skip out.

But I follow the hypocritical emotional road and lay down the line, Either I get paid Tuesday or he GETS OUT!!

Even in our lack of a mutual language I am quite sure I got my point across, now I play the waiting game.

My question for you, what would you have done?  Let me know your thoughts in the comments below and I’ll add an update Wednesday about what happened!

Update Friday

Just to make this worse, I’ve extended to tomorrow. The tenant paid $200 to buy a few more days, but tomorrow is the cutoff. I meant to update Wednesday, but it’s been one of those weeks that will likely be extending out for the entire month!

Poof, It’s Magic!

Yes, I’ve had another tenant disappear…

I was at the property Monday to get some work and cleaning done there (I rented a steam cleaner for the day, so I was bouncing from property to property to get the most bang for my rental dollar) and my tenant’s room was wide open, all his items were gone, the room was quite clean, his keys were on the dresser and he was gone.

Bottom line, I’m out a bunch of money, my faith in humanity is eaten away a bit more and in the end I can still sleep at night. I tried to help, deep down I knew it probably wasn’t going to work out for me, but as part of my nature I really do want to help people (hence this site!), just along the way I may have to take a little damage.

The hypocritical lesson to pass along is if things are really tight, you can’t take this chance. You need to clamp down immediately. I could probably rationalize some of the loss as I would have had a vacant room for multiple weeks anyway, but it’s still a loss. If you have more losses than wins, you eventually lose and in Real Estate, you lose big when you lose.

 

The Basics of Being A Landlord – The Skills You Need

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So You Want To Be a Landlord?

I seem to get a few emails/calls about being a landlord, so here are some quick thoughts from me on the basics of being a landlord.

This will likely be a multi part series, so this post will focus on what skills do you need to be a landlord?

screwdriversmallHandyman Skills

Well some landlords I know are incredibly handy people, they are great with renovations, they love working on their properties and they are you typical Mr. Fixit’s.

However, I know many landlords who’s only tool they have ever used on their property is pen and paper. Rather than investing their time in a property, they have simply hired someone to get the job done. So while being handy helps, I guess it’s not a needed skill.

People Skills

How about people skills, a good landlord should have people skills! Again I know many landlords that are great people people and having the ability to relate to the tenants and get along with them has helped them tremendously.

But as I think about it, these same people have some challenges because they tend to get buddy buddy with their tenants, which rarely seems to work out well.

I also know many landlords who I would definitely put people skills at the lower end of their abilities, yet they are also tremendously successful. So maybe people skills aren’t quite as essential as it seems to be a successful landlord.

Fierce Negotiator

agreementsmallThis one has to be important because first you need to be able to negotiate the best possible price on the property you’re purchasing as a rental property, then you need to negotiate with contractors to get the best prices, tenants to get the highest rates and everyone in general to get the best deals.

Except this can be a horrible plan for long term success.

The people you buy your property from resent you for being such an aggressive negotiator, the contractors won’t work for you again because they hate getting nickelled and dimed and tenants can’t wait to get out as they never feel comfortable and often feel ripped off.

In my experience it often works out far better when it’s a win/win negotiation. Where both parties get a fair deal whether it is the purchase/sale of the property, the renovation work and even the rental amounts. So maybe you don’t need to be such a fierce negotiator to make your job as a landlord easier.

Now, I’m not saying have some of the above mentioned skills won’t help you, it just appears they may not be as important as people often believe. Many people find success anyways, even if they are lacking in or more of the above areas.

So what skills are valuable to a landlord?

Organization, Patience and Humility

hourglasssmallNow these three skills I do believe are important. Again, they may not be essential, but definitely important.

If you’re organized you can find records, receipts, invoices and more that are required for everything from your taxes to warranties to simply getting your books done correctly. Having systems in place to guide you along the way is one of the best methods to help with this.

If you’re patient and understand your Real Estate is a long term investment it makes being a landlord much easier. With the constantly changing market trying to time your purchases of a rental property and your selling of them can be incredibly stressful.

Rather than following the get rich quick path that so many people promote with Real Estate a longer term approach with an extended time frame (and lots of patience) will guide you through the ups and downs of the inevitable transitions through both buyers and sellers markets.

Finally humility. Have you ever run into a pompous landlord who knows everything about Real Estate? I’m willing to bet many of you have and apparently one ex-subscriber felt that way about me.

You need humility so you can go to others when you have questions or are unsure of the answers. It’s why you need a Real Estate agent who understands investment property when you’re buying. It’s why you need an accountant familiar with Real Estate if you are a landlord so you are aware of the correct deductions you can apply for and the correct processes for setting up your accounts.

It’s why you need to call plumbers, drywallers, painters and other contractors when something is beyond your scope or when it makes sense to bring a pro in to get the job right. Doing all of this takes a bit of humility at times as we often believe we can do it all.

And perhaps we can, but if we do, then we lose focus on what the property is. An investment that should be run as a business.

What do you think?

Saying No To Rover, Is It Good Landlording?

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talking iwth tenantsI stopped for gas yesterday at my go-to out of the way gas station right that’s near several of my rental properties and as I’m filling up a mini-van full of  a mom, a dad and at least two kids I can see pulls up to fill up as well. Behind the minivan is about a 16 foot trailer and as he gets out to start pumping his gas, a small cute little dog hops out of the van to check out the surroundings.

Now we’ve had a few cooler days recently and it was turning into quite a nice late summer day so as guys tend to do as he’s standing there filling up and as I’m standing there filling up, we start talking about the weather. Which turns into how the next several days are supposed to be great and the upcoming weekend looks like it should be fantastic.

It’s about that point that I bring up the trailer and ask, Are you just getting back, or are you getting ready to head out for the weekend? That’s when things got awkward.

It Wasn’t a Trailer, It Was Home

Tenants calling a trailer homeThat’s when he explained to me that they were staying in the trailer because their landlord sold their rental property six months ago and because they had a dog, they couldn’t find another place. He, his wife, his two (or more) kids and the dog had been calling this 16 foot trailer home for half a year. He said “Landlords are being too picky.”

His next comment was how with winter coming up quickly, that they were going to have to start thinking out of the box.

Being a landlord, and starting to feel a little defensive after hearing that, the conversation slowed down at that point, but as we both stood their filling our vehicles, it really made me ponder about pets, rental properties and what the right thing to do was as a landlord.

Now I wasn’t talking about offering up one of my properties, more along the lines of whether it’s right for landlords to not allow pets, or what the repercussions of allowing more pets in our personal rental properties would be.  It became quite an inner monologue with myself for the next half hour as I was driving to meet a landlord, whom I mentor, for coffee.

Seeing a situation where a family is stuck camping because they can’t find housing is a heart breaking situation. You wonder what’s life like for those kids and how tough things must be. School has just started, are they even going, are they allowed to go without any type of permanent address, what if they can’t find a place, what happens to them, and of course should landlords like myself be more lenient about pets?

Life Decisions Can Be Hard

Is there a right course of action when you see this going on? During coffee with Tim I quickly brought up the gas station conversation just to see what Tim’s thoughts were as well. I already knew my answers and had perhaps even rationalized them during my drive, but it never hurts to get other opinions or ideas.

Perhaps as an experiment, maybe you need to stop reading after the next sentence and go write your thoughts about this down in the comment section at the bottom of this article. I realize many of you are just passive readers, but it would be interesting to see your thoughts now and then perhaps any revised ones after the rest of this article.

So if you can, humor me and go leave a comment so far about your thoughts on landlords and pets, then come right back here.

I’ll wait, don’t worry…

Still waiting…

Done yet?

My Thoughts On Pets and Rentals

thinking about letting tenants have petsMy discussion with Tim didn’t actually change my thoughts, rather it just cemented them. It’s my property and it’s my decision and if it comes down to two equally qualified tenants, one with a pet, one without a pet, 100 out of 100 times, the tenants without the pets get the property.

It’s so 100 out of 100 that almost always my advertisements say no pets and when prospective tenants call, yes small dogs, kittens and chinchillas are all pets, but thank you for calling.

It’s not that I’m against pets. I personally have two cats and a gerbil in my household and even had a cat back 25 plus years ago when I was a tenant. And I do have one older tenant in a house with two small dogs, so I’m not entirely ice-hearted.

The problem ends up being, the risk of tenants having pets isn’t worth the reward and that is the one phrase you have to remind yourself about.

And while it might be unfair, in someone’s mind, to the responsible pet owners out there it’s not them taking the risk and the chance that that Missy may pee on the carpet, unaware to them or you. Or more often, well aware to the tenant, that Spot has destroyed the back yard and he’s left hundreds of little surprises under the blanket of snow for you to deal with in the spring now that they have moved on.

Experience has taught me that having to replace that carpet, even though it wasn’t a large carpeted area, cost me money. Not just the cost of replacing the carpet, but the extra two weeks I was vacant as I waited to get the carpet replaced. It adds up, and it didn’t have to.

Experience has taught us that cleaning up after someone else’s dog is complete crap. (Although a quick tip we learned the hard way is it’s best to do it first thing in the morning in the spring as it’s way less fun to pick up once it warms up).

I feel bad for tenants who can’t find rental places because they have pets, but I never forced them to get a pet. They made the decision and reduced ability to find good rental properties is part of the price. I understand the pet being part of the family and I understand how having pets can help kids be more well rounded (sometimes debatable).

What I can’t understand is the decision to have multiple large dogs, to know you will be a renter for an extended period if not forever and then to announce that it’s unfair that landlords don’t accept pets. Or the crazy cat lady/family who can’t find new housing. Those folks I don’t really feel bad for.

You’ve made poor or outright bad decisions that you have to live with and now it is indeed time for you to make harder decisions. Perhaps it’s time to give up that pet until you are in a position to own your own home and make your own rules.

Anyways, that’s my thoughts and I’d love to hear yours! So leave me a comment below.

Learning To Landlord By Trial And Error

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Learning to landlord by trial and errorSounds scary doesn’t it? Making a mistake as a landlord can cost thousands of dollars in lost rent, due to damages and in some cases even lead to foreclosure. But I run into landlords every week who got into the business with minimal to zero knowledge of even the basics of being a landlord.

Learning to landlord on the job can turn into a very expensive education and that’s where I come in. Hopefully.

With dozens and dozens of articles and videos on the site providing the basics already, I’m planning on adding even more so I can help others avoid the trial and error path.

Now, if you’ve already registered to receive emails on my site you know one of the first things I ask you is what challenges you face as a landlord. I’ve had some great responses from people and hopefully I’ve provided some answers to help you with those challenges in my replies to you.

The question I have for you in this article though is what was your most expensive mistake?

My Expensive Landlord Mistake

costly landlord lessonsPersonally, my biggest mistake when I started was not following my screening process and skipping steps along the way. During this learning curve I let in some of the wrong people because I went with my gut, rather than following my process.

This brilliant decision making cost me most of my Christmas vacation as I had to spend it fixing walls, repainting a property I had just painted less than six months earlier, cleaning and doing general fixes so I could have it ready to go for January 1st and not lose anymore incoming rent money due to vacancies or deadbeats.

It’s part of the reason why one of the first courses I put together on the site was my tenant screening course, which I give away for free because it’s so important to a landlord’s success! Since I started following the procedures I laid out I’ve only had to evict one tenant out of my regular fixed term rental properties in the last seven years.

Of course, if I had followed my rules that one eviction would have never come to an eviction which was another lesson. That particular situation involved a young couple who split up and rather than  allowing/forcing them to break the lease and both move on, I allowed the boyfriend to stay and to have his brother move in to help cover the rent. Ooops.

So maybe that didn’t fit specifically into the screening category, but it did fit into my screening system which I strayed from as I didn’t due my proper due diligence with brother number two.

Your Turn

Your Landlord LessonMy list of other expensive lessons could go on. From not doing enough due diligence one early properties  we bought to initially trying to do all the work ourselves rather than farming work out to contractors. But what about YOU?

What have some of your expensive lessons been? If you can take a few moments to leave a comment to help other landlords that would be great. By sharing some of our experiences we can make it easier for others to learn from our lessons and to help avoid some expensive pain.

Plus it may point me in the direction of my next course which hopefully helps everyone.

So leave me a comment below and let’s see who we can help with it!

Why Thinking Like A Tenant Pays Off

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Landlord thinkingAs a landlord you often have to think carefully about your property. There are monthly costs to consider, maintenance issues to budget for and mortgages to cover just to start with.

Throw on dealing with tenants, potentially property managers, keeping neighbors happy and the list gets longer and longer. You simply think differently when you’re a landlord and the property is a huge investment you need to manage, maintain and care for.

Yet one aspect we often overlook is thinking like a tenant at times, rather than constantly wearing our owner’s hat.

What Would Your Tenant Think?

As an owner your costs seem to continue to grow. Taxes increase, utility costs increase, legal fees increase, everything seems to be increasing, all at your expense.

One way to combat this is to pass these costs onto your tenants by raising rents. Now, I covered how to go about this in a previous article (Raising Your Rents Without raising The Roof), but the important part about it that I didn’t talk enough about is to think like your tenant!

If you just show up minutes before the cut off of when you can legally raise the rent and throw a rent increase notice in your tenants face you could be setting yourself up for trouble. Just imagine how you feel when you suddenly see a huge increase in fees from your bank or a large jump in your taxes.

It’s the same for the tenants. All they see is a money grubbing landlord looking out for themselves and jacking up there rent for no fair reason. They don’t see the three years prior where you couldn’t or didn’t raise the rents, they don’t see the vacant months that you covered right out of your pocket, they simply see a big fat increase that affects them.

In the previous article, I talked about positioning and explaining why you’re increasing the rents to help soften the blow. But part of the explanation I didn’t cover was planning further ahead.

Don’t React, Lead The Market

Landlord leadershipYou’re running your landlording like a business. You know that costs increase over time and you know that your tenants rent will be going up, even if it’s just $25 or $50, in six months, so why not let them know there will be an increase way in advance?

You don’t have to specify how much, just that you’ve been reviewing some of the costs and local rents and expect there will be a small increase in the future. Again, you value them as tenants, so you’re going to do something that is fair to both of you, so make sure they are aware.

Now, rather than reacting last minute you are leading them and you can make a decision that works for potentially both of you. If you see that your costs haven’t really increased and the tenants are fabulous, you may come back to them in another couple of months and let them know upon re-examination you’re going to hold off on any increase this year.

Or you may simply go in with a small $25 increase to cover minor increases that you’re having to cover for anything from taxes, to bank fees to insurance. Or, if the market has skyrocketed you may need to consider increasing rents by much more so as to not miss out.

However it plays out, you’ve forewarned the tenants in advance so they aren’t completely blindsided.  Now, rather than being upset, they typically appreciate the advance warning and can make plans to either move on, allowing you to put people in at the higher rate, or to prepare to absorb the additional costs.

Expanding on this you can also start including tenants on longer range plans.

Preparing For The Future.

Sometimes you know you have work coming up in the future on your property, so why not include the tenants in the updates?

Whether it’s a new roof, a new driveway or even a new fence, let the tenants know the proposed plan. If you’ve started to plan to get the roof done in the spring or the rotting deck upgraded before summer, give the tenants advance warning and let them know so they can prepare.

Once you talk with them who know what else you can discover. Maybe they are going to be away on vacation for a week and you can coordinate your project to take place while they are gone?

Now it’s very little inconvenience for them and they are rewarded with a new roof ,deck or some property improvement that makes their enjoyment of the property better upon their return.

If you start working with your tenants and thinking about what makes them happy and perhaps a little more prepared for you, it starts getting easier to keep them longer all while keeping them happy.

It’s a win win for everyone! Are you already thinking like a tenant? Or do you simply leave your landlord cap on and push forward upsetting tenants and replacing them every year? Tell me how you prepare for the future!

 

Renting Out A Storage Garage To Increase Cash Flow

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Why Are People Renting Out A Storage Garage?

Renting Garages At Your Rental PropertyIf 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?

Rental garageThe 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

My storage GarageSo 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 Organized storage garagebasis. 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