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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

Why Discounting Your Rents Is For Amateurs

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And Why Professional Landlords Get Premiums!

make your rental stand outFirst month free. Free TV with purchase. Don’t Pay until…..

You see these types of discounts in ads everywhere these days. You also see these types of businesses that promote like this come and go and there’s a reason. They trade in commodities.

Commodities are items that have little value and are typically traded or bought for the lowest cost. Trading in commodities is not good business for the simple reason that you are tied into the lowest price. The lowest price doesn’t give you margin for error or more importantly for profits.

As a landlord, if you start offering discounts on rents to attract tenants, you’re turning your property into a commodity rather than a valuable asset. Yes, you have to be competitive, you can’t price yourself out of the market, but as a long term strategy, you want to be a leader rather than following the pack off the cliff.

Discounts are the easy way out and once you start offering them, they become expected. If you’re a retail store, maybe that’s to be expected, but to really succeed you don’t want to be the next Walmart or Target, set your sights higher and become a premium brand.

If you’re following some of my systems and tips, you know it’s important to be a professional and to treat your landlording like a business. If you become an educated landlord, one of the areas you need to look at is the condition of your properties and how they appear to prospective tenants.

We learned a long long time ago that if you spend a little extra initially to get the property better than your competitors it pays you back in increased rent, longer staying tenants and tenants that take better care of your properties. And here’s why..

The Argument For Increased Rent

If you do any tours of competing properties, even if this just involves reviewing other ads and photos of properties in your area, they all tend to be the same. Picture of the kitchen, picture of a bedroom, picture of a living room and some bad writing offering a price and maybe a few details.

Occasionally though, a few stand out. Usually they’re priced higher, the pictures look more professional, and the advertising copy looks polished. You want to be the landlord who is renting out that property for several reasons.

By looking more professional and by charging higher rent, you’re automatically going to push many of the less desirable tenants away. If they have a poor track record of paying rent, they understand a professional landlord will be screening them more thoroughly and they won’t even qualify. If the rent is higher, they understand they won’t be able to afford it and they will be cash strapped. And if the advertising copy comes off as professional it will also help to discourage them from even inquiring.

You move from quantity to quality and what you are looking for is quality tenants.

If you ever rented (I rented for years until my wife and I could afford our first house), you probably looked at a lot of properties before you found the right one. We personally couldn’t believe the condition of some of the properties that landlords thought were rentable. I still hear this from tenants when I question them how their search for a rental is going.

Once you did find the right one though, you had to have it. And it didn’t matter if it was an extra $100 a month, it stood out in your mind over the previous properties and it became even more valuable in your view point. This is the type of property you want and the mindset you want to instill in tenants that view your property.

Now, to get to this level, you may have to spend a few extra thousand dollars initially for extra renovations or updates, but this not only helps increase the overall value of your property, but that extra $75 per month, or perhaps $200 per month of extra income in a great property, sure helps increase your cash flow.

The Bonus’s of Better Properties

The extra cash flow isn’t the only bonus. If you have a better property, tenants tend to stay longer because it is such a great place to live. They actually become much more hesitant to leave as they don’t want to give up a  great property.

This translates into less tenant turnover and longer periods between vacancies. Which simply means more money going into your bank account for longer periods of time and that helps ensure you continue to be a successful landlord.

These tenants that are also willing to pay extra to live in this great property, also tend to take better care of it. If they truly take pride in where they live, they want to make sure it looks great and they keep it that way. You’ll end up with fewer repairs after tenants vacate, less work for when the turnover eventually takes place and if there are any issues with the property like leaky taps, these types of tenants will let you know immediately, rather than finding out after repairs become more expensive.

Unfortunately I can’t guarantee every tenant will be a success using this strategy, but in combination with other strategies, it sets you up for success.

How To Avoid Discounting Your Rents

So let’s recap some of the strategies that can help make this work for you.

Buy rental properties in rental heavy neighborhoods. This gives you a much larger tenant base to choose from. You start with quantity and narrow it down to quality.

Renovate your properties to help them stand out from competitors. This makes your properties memorable and helps you receive premium rents.

Write better ads with better pictures. Stand out from the crowd and get people appreciating your property and it’s value rather than looking for a commodity.

Don’t discount your rents to attract tenants. Tenants that are attracted to discounted rental units will also leave quickly if they can get a better deal. Don’t be a commodity, create an environment where tenants want to come home to.

So, did you find this helpful? If you did, could you do me a favor and share this with at least two other landlords you know? The more landlords we have out there that are better educated and running true landlord businesses the better the environment for tenants, which makes a landlords job easier. It turns into a win win situation, so spread the word!

Landlord Video Tip – Saving Time With Future Ads

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Rental Ad Time Saver

Inevitably you end up with a vacancy and suddenly you have to fill that vacant property again. Now you’ve got to try and find all those old pictures, remember what you wrote about in your last ad and then compile it all together again so you can start filling up your space.

Does this sound familiar? If you have multiple properties the problem compounds as you try to keep them all straight. Fortunately I have a solution for you, actually a couple solutions.

In the following video, I’ll go through how to save your time later by taking some action and being pro-active now. then after you’ve watched the video, I have an additional tip to help you out below.

As always, I love to hear any feedback you have and I also appreciate it if you can like and share the video and the post with other landlords you know. So here’s today’s video,

Was that helpful? Is it something you can implement today to help your landlord business in the future?

I talked about the creation of folders on computer as well and this is one of the best tips I can recommend to you. We have folders for each of our properties, folders for our rental forms and folders for almost every stage and type of form we use.

A quick review shows folders for each company, for rental forms, for purchase forms, for our shared accommodation properties and even for faxes/notices.  All logically broken out so we can find them quickly. Well logically to us at least.

Anyway, as per the video, when we write up our ads, we store copies of them in the appropriate folder and also the images we use for our ads. We don’t just limit it to a couple images, but keep adding as tenants and the look of the property changes so we have a range of pictures we can use.

So again I ask, have you already done something like this, or is it something you can start? My plan for the next few months is to try and add one new either video tip or post for you per week. Looking forward to any feedback you may have!

Landlord Video Tips – How To Get Great Photos For Rental Ads

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Photos of your rental propertyIn this video I have a handy tip to help you get great looking photos for use in your advertising.

As they say, a picture is worth a thousand words and when it comes to making your rental property stand out, having a great picture in your ad can make all the difference. The problem is, how do you make an empty living room stand out?

That’s where today’s tip comes into play. In fairness, this won’t always work for you, and it won’t always work in all properties. It depends on your tenants, the properties condition and your tenants cooperation. Hopefully by now you’re looking forward to the video, so go take a look!

Oh and don’t forget, leave us some feedback, if you like the video, be sure to like it and share it with other landlords and if you have questions you’d like me to answer in a video, just leave it in the comment section below! Happy Landlording!

If you haven’t registered, how will you know when the next video is ready? If you’re not registered, scroll up to the top and fill in your name and email on the top right of the screen and I’ll update you when I have the next video up, plus you’ll get more articles, tips and ideas on how to be a more profitable and better educated landlord.