Garage Rental gotcha's ?

Question

I have a quad in South St Louis with a detached 4-bay garage.  Parking is not included in tenants' contracts so it is available to rent on its own.  It has 2 double doors and no inner walls so it is not secure for storage.

I can probably get $35 - 50/ mo /space.  Does anyone know of any special liabilities that would make this not worth trying?

If you are doing something similar, please respond here or PM me.

Does anyone have an appropriate contract

Landon Elscott · Answer

Oh, and from a liability standpoint, it's no different than with your units.  You cover what is yours (the building) and tenants cover their belongings.  The fact that the units are shared doesn't necessarily change anything, although I suppose it's possible that some insurance agencies might deny someone if their "safe and secure" storage consists of shared spaces.

Landon Elscott · Answer

Here's my opinion, for whatever it might be worth.

Option 1: If you're going to use it for the tenants, since you have an equal number of spaces to the number of units, I'd just build the cost of the spaces into the lease instead of trying to do it as a "bonus" option - although, existing tenants might not be pleased with a mandatory rate hike for a garage space you previously told them was optional.  However, for you new tenants, by including the garage storage space as part of rent, you're guaranteed additional income from the garage as long as your units are filled and rather than being an additional expense for tenants, it simply becomes an added feature included with rent.  If you try to do it as an optional bonus, I just see it as being an additional hassle of trying to find tenants to lease the storage in addition to tenants who lease the apartments, and then trying to manage individuals who are using a shared storage space who both live on and off site.  Sounds like an easily avoided headache that allows you to increase tenant parking and amenities, while increasing profits.

Option 2: If you're going to rent to it separately, I'd strongly consider separating it into two separate spaces, and then renting it the two spaces out for double the amount you initially mentioned each of the four spaces being worth.  In this way, since you have more units than you have apartments, you're creating demand for storage - which is why many large apartment complexes offer covered storage as an added lease bonus - they don't have enough storage units to match the number of housing units.  So now what you'll have created are (2) separate two stall spaces you can rent for perhaps $75 to $100 a month, and that's much easier to advertise to outside individuals.

If you include the spaces as part of the lease, I think it's acceptable to leave the spaces shared, just as if it were a parking lot, except there's the convenience of doors and a roof, but people should know that even with doors and a roof, it's not necessarily secure by any means - other tenants or their guests could easily access belongings just as if they were in the parking lot.

However, I recommend, if you're going to rent the spaces out separately, at least separate into two areas.  Again, this creates demand that will entice tenants to jump at the opportunity to lease storage, but it will also make for less hassle in regards to safety and desireabilty.

A few years ago, I had to use a shared storage space out of necessity, it was the only available space in town to store my Mustang Cobra.  At the time, I was living with my parents, so this storage space was sort of my place to store all of my automotive hobby stuff and detail my car.  It was essentially a big warehouse type place with individual doors, and people stored semis and boats there, too.  Anyways, my Cobra had 5% tint on the windows, so you couldn't see in them, and on a couple of occassions, after washing and waxing my car, I'd come to the storage unit and find palm and nose prints on the window.  It happened a lot in parking lots, too, but it was just not cool thinking this was supposed to be a safe place to store my car.  I started looking for other locations at that point and subscribed to gps tracking on the car.

Joshua D. · Answer

why not rent the whole thing to one person. I am always surprised at how much people like to store stuff.  In our area storage has almost 0 vacancy year round.

In my opinion it would be best to put a wall between the two doors and rent 2 units.   I just did this with a 32' by 20' garage we had behind one of our duplexes.  I do not charge extra for the garages I just hope they make my units more attractive.

As far as liability there are much more experienced people that can help there, but from what I understand stuff inside the units is the tenants responsibility to insure.   I assume you have to provide reasonable protection, (locking door) but again I am no expert.