Rental Property Investor · Saint Louis, MO · Member since 2014 · 313 posts · 326 votes
We just closed on our 2nd property which includes a garage split into 4 storage units each with their own roll-up garage door on one end and steel door on the other. The previous owner had been renting them out separately, i.e. not to the apartment tenants. We would like to continue to do so for added income as here in St. Louis City, storage in these older properties is quite limited and there seems to be a solid demand for extra storage units.
Does anyone have any experience renting units like this? I'm looking for tips, best practices, a lease/document you use, do you typically shoot for 6-12 month leases or just month to month from the start? Do you run a background or credit check or take a deposit?
Two of these units are leased but the tenants have not paid in 2-6 months so I am also looking for insight into storage unit tenant laws and how I go about evicting their stuff for non-payment? Any comments are welcome. Thanks BP!
Landlord · Saint Louis, MO · Member since 2016 · 29 posts · 13 votes
8y
Hi Max,
Congratulations on the potential storage unit rentals. I am very happy with my garage rental unit . I used a specific, one page lease for the garage which specifies limitations on what can be stored there and the overall use (i.e., no storing hazardous materials, no running a business out of the garage etc.). Evictions should be easier than for a domicile, but I would still recommend getting a lawyer involved. I don't think you can just auction or throw out their stuff. Perhaps 'mystery shop' one of the bigger storage providers and take a look at their terms and conditions/contracts? Good luck!
Real Estate Agent · St. Louis, MO · Member since 2017 · 34 posts · 26 votes
8y
@Max Householder Do you have the current leases for the non-paying tenants? I'm assuming not, but if you do, then obviously that should get you some insight. Wish I could help more, but I don't have experience in this area.
Accountant · Saint Louis, MO · Member since 2017 · 409 posts · 362 votes
8y
Hey Congrats @Max Householder! I love my garage rental unit. My tenant pays every month and I pretty much never hear from him.
For leases, use your standard lease and just adjust the parts that apply so it works for a garage storage unit. I took the city's standard lease and edited out everything related to people living in the unit, added a clause stating it may not be used as a domicile etc...I can send you what I edited.
As for evictions, it's a whole lot easier since they're just storage units. Check with a lawyer, you'll want to do it right, once you do it the first time you should know what to do should it come up again. I get $160/mo for my garage rental unit, so I definitely wouldn't dilly daddle with the timing, get this taken care of ASAP. Maybe send notices today that if they don't bring their accounts current by X date you'll begin eviction proceedings.
I believe if you evict, you can auction their stuff off, keep what you're owed, and send the rest of the proceeds to them. Although unlike the reality shows, it usually isn't much.
Landlord · Saint Louis, MO · Member since 2016 · 29 posts · 13 votes
8y
Hi Max,
Congratulations on the potential storage unit rentals. I am very happy with my garage rental unit . I used a specific, one page lease for the garage which specifies limitations on what can be stored there and the overall use (i.e., no storing hazardous materials, no running a business out of the garage etc.). Evictions should be easier than for a domicile, but I would still recommend getting a lawyer involved. I don't think you can just auction or throw out their stuff. Perhaps 'mystery shop' one of the bigger storage providers and take a look at their terms and conditions/contracts? Good luck!
Specialist · Kansas City, MO · Member since 2018 · 22 posts · 10 votes
8y
You can auction off contents of units after a certain amount of delinquency and after providing written notices and so on....just look for local laws and make sure to document. DEFINITELY not like the TV shows (which are not reality) but if you advertise the auction, you could recoop losses by bringing buyers that know how to resell the products inside (if/when applicable to what's stored). My parents own several large storage facilities and they have hosted auctions but it's a last resort. Their first goal is to have longterm tenants so they work hard on customer service. But their ultimate goal is to get a paying tenant - whether it's the current person or a future person - and the auctions do not usually bring a profit....the winning amount usually goes towards the amount delinquent.
They screen people really well and their goal is to get people to stay as long as possible. Most places in our area have up to 12 months of continuous leasing and their facilities usually have 2-3 years of leasing (resulting in more profit due to less vacancy). And their first tip to most new business owners - do NOT offer free first month. Most people with short tenancy just need items stored for a few weeks and the free first month types of ads mean you won't actually get paid at all from that tenant.....or worse, they'll come back month #2 saying "it cost so much to move, I just can afford to pay Xamount for this unit. Since my stuff is already there, can I pay less?" And if you say no, you're stuck. Advertise what the property offers and WHY they should pay.