In my 4-fam, there is a four car garage attached to the property.  It is a pretty small 4-car garage and to give you an idea, 4 Honda Civic's would fit semi-comfortably in terms of opening doors.

I am house hacking this property and currently only 2 cars are parking in the garage because it is much more comfortable to fit one car per half.  I have been letting two of the tenants park in there and am trying to determine how I want to handle who gets the garage spots.  

Does anyone have experience with handling how to charge for a spot in the garage?  I am thinking on Nov 1st, I will write a notice that one spot in the garage will cost $25.  The garage spots will be on a month-to-month lease.  I am thinking about painting lines in the garage to space out the spots and numbering them 1 through 4.  

Thoughts?  Experiences?  Tips? Thanks!

Instead of using the garage for storage, would it be better to convert it to storage space since it is so small? You may want to divide it up with partition walls though so they can't access eachother stuff. Just another option..

Seems simple enough to me just write up a separate lease for each garage space

If you have been letting them park there already, you may not be able to charge until their current lease is up. 

@Stephen Bell not a bad idea, hadn't put much thought into that option.  However, I think there's more value with having your car out of the snow/dew/etc.

@Ned Carey I agree, I am starting to write up some leases for the spots.  However, what if one tenant does not want a spot?  Can I offer their spot up to another tenant?  What if one tenant wants to pay for 2 spots so they can comfortably fit a car in there?  

Here is one scenario:

Tenant 1:  Buys 2 spots to fit car into garage easily

Tenant 2:  Buys 1 spot

Tenant 3:  Buys 1 spot

Tenant 4:  Does not buy a spot because their truck wont fit into garage.

Then Tenant 4 moves out and a new Tenant 4 moves in.  They want to pay for a parking spot.  

What do you do from there?  

Ask Tenant 1 to give up one of their spots at the end of their lease?  Seems like it could get pretty complicated.  

Currently they are on a month-to-month lease and the current lease has nothing regarding parking spots.  

Then Tenant 4 moves out and a new Tenant 4 moves in. They want to pay for a parking spot. 

The same thing that happens when a tenant wants to move into a fully occupied building. They have to wait for an opening. If you have separate leases for the parking, there is no reason someone even needs to be a tenant of the building to lease from you. 

You can complicate it as much as you want, with right of first refusal etc., but first come first served works for me.

Originally posted by @Ned Carey :

Then Tenant 4 moves out and a new Tenant 4 moves in. They want to pay for a parking spot. 

The same thing that happens when a tenant wants to move into a fully occupied building. They have to wait for an opening. If you have separate leases for the parking, there is no reason someone even needs to be a tenant of the building to lease from you. 

You can complicate it as much as you want, with right of first refusal etc., but first come first served works for me.

 THANKS for that insight, I wasn't considering it as a first come first serve, but that is exactly what I will do.  All it takes is a little tweaking and brainstorming to create a little bit more cash flow.  Really appreciate the tip!

Play around with a Dutch auction - take bids for 0.5 space. Someone might want 1.5 spaces.

Our garage is an addendum to the lease- consider attaching the garage rights to occupancy in the building and doing a termination connected to the apartment lease termination. This is particularly relevant for storage.  If you allow storage and don't tie it to occupancy then you risk having stuff or even a car stored on your property by a non-occupant while your primary customers (current apartment tenants) are waiting.  Beware of the pack rat!

As for fees you will need to decide, are you competing with a storage unit?  a parking space? 

Do you want to offer first to the tenant that will provide the best benefit to you?  Relief in your parking situation? Been there the longest?  if you go to year leases- soonest renewal? 

If it is too small maybe make it 3 spaces?

We have 2 garages available and 6 units so we have a different scenario.  I might just do a lease at a higher price in your situation with the garage parking and see where it gets you.  do the garage doors close? can they really use it for storage?   Can you monitor only paying customers are garage parking if you start charging?  

Originally posted by @Al Williamson :

Play around with a Dutch auction - take bids for 0.5 space. Someone might want 1.5 spaces.

 Good idea, the spaces are blocked off by support beams however, where 1.5 may not work out the best.

Originally posted by @Colleen F. :

Our garage is an addendum to the lease- consider attaching the garage rights to occupancy in the building and doing a termination connected to the apartment lease termination. This is particularly relevant for storage.  If you allow storage and don't tie it to occupancy then you risk having stuff or even a car stored on your property by a non-occupant while your primary customers (current apartment tenants) are waiting.  Beware of the pack rat!

As for fees you will need to decide, are you competing with a storage unit?  a parking space? 

Do you want to offer first to the tenant that will provide the best benefit to you?  Relief in your parking situation? Been there the longest?  if you go to year leases- soonest renewal? 

If it is too small maybe make it 3 spaces?

We have 2 garages available and 6 units so we have a different scenario.  I might just do a lease at a higher price in your situation with the garage parking and see where it gets you.  do the garage doors close? can they really use it for storage?   Can you monitor only paying customers are garage parking if you start charging?  

 The garage does not have a locked door.  There are 2 big doors that are manual.  I will not be competing with a storage unit and would most likely not allow anyone but the tenants to use the garage if they paid for it.  

I would want to offer to the best tenant that will provide me the best benefit, that is a good way to look at it.  However, I currently live in the building and have C class tenants in a B Class area.  I think the best option at this point is to tell the other tenants on Nov 1st there is going to be a $25 parking fee for one spot.  I will give them the option to purchase two spots if they wish.  

One thought you gave me was I could just split it out to rent one half of the garage, this would eliminate the tightness.  

As for monitoring the parking, I would not be able to self police the parking situation.  I would include in my housing lease the parking RULES and state that if you are not paying for a parking spot, an automatic $100 fine will be issued.