Garage or NO garage - in duplex construction

Rental Property Investor · Nephi, UT · Member since 2019 · 1 post · 0 votes

I am in the middle of bidding out the construction of a duplex in a rural area. I'm building in rural Utah (there is a lot of snow) and am trying to decide on constructing a garage or not. I will be able to rent each 3 bedroom duplex out for roughly $900 (+ or - $100). I should expect an additional $200 - $300 in monthly costs (P&I) if I proceed with a garage. Have you noticed an big enough difference in rent price dependent on having a garage? IS IT WORTH IT!?

Thank you! I am looking forward to your experience.

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Todd Willhoite

Attorney · Claremore, OK · Member since 2013 · 125 posts · 61 votes

What does your competition have? How does it effect their rents? What effect will it have on vacancy? (Will tenants choose to rent one with a garage before renting one without a garage?)

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Todd Willhoite
Attorney · Claremore, OK · Member since 2013 · 125 posts · 61 votes
7y
What does your competition have? How does it effect their rents? What effect will it have on vacancy? (Will tenants choose to rent one with a garage before renting one without a garage?)
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Amy KendallBusiness Member
Real Estate Broker · Lehi, UT · Member since 2016 · 397 posts · 318 votes
7y
We are buying two duplexes in Arizona right now that are new construction. We came into the project at the end, and they had chosen to build without garages. Most of the rentals in that area do not have garages, but I really wish garages had been included. I just think it keeps the property looking a lot nicer because the tenants have a place to put their stuff. With this property, I am afraid they will have stuff piled outside with no place to put stuff. I think we will end up building at least two sheds and charge those out for additional rent in the near future. Plus, it always is nice to park inside and avoid the frost on the window in the early mornings. We are probably going to build two more duplexes in that same area, but the next ones we build will have garages for sure. Also, I think if people feel like they have enough room to keep their stuff and don't outgrow the place, they tend to stay longer. Just something I have noticed between my properties that have space to store stuff and those that don't.
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Account Closed
None · Member since 2018 · 125 posts · 46 votes
7y
@Reed Udy Since you are building in a rural area, I'd assume most people have vehicles to get around and would have use for that space. I would say that since you see a lot of snow in the area, a garage would be a big plus for tenants (not having to scrape ice off cars in the morning, walk outside in the cold to the car, etc.). An additional $200-300/month sounds pretty good, but I would still compare it with the cost to construct the garage and what your return on investment with that would be over time.
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Steve Kontos
Investor · Great Neck, NY · Member since 2016 · 679 posts · 467 votes
7y
@Reed Udy
The area should dictate that. What type of tenant are you getting in these types of areas? As @Todd Willhoite mentioned, what do nearby buildings have?
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Sam Shueh
Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
7y
W/O garage where are you storing things. It would be a definite minus.

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Anthony Dooley
Investor · Columbus, GA · Member since 2014 · 2k+ posts · 1k+ votes
7y
Will a garage increase the rent? It should. If so, how much? Based on the additional cost of the garage, what would the ROI be or how long would it take you to break even with increased rents from that additional garage? For me, it's all about the numbers. Is there potential to add a detached garage at some point in the future, which would result in increased rents?
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Jaiden Olsen
Rental Property Investor · Kaysville, UT · Member since 2017 · 141 posts · 120 votes
7y
If you really think you can get an additional $200-$300 per month each side, you can't argue with those numbers! I'd definitely go for it!
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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
7y
Originally posted by @Reed Udy:

I am in the middle of bidding out the construction of a duplex in a rural area. I'm building in rural Utah (there is a lot of snow) and am trying to decide on constructing a garage or not. I will be able to rent each 3 bedroom duplex out for roughly $900 (+ or - $100). I should expect an additional $200 - $300 in monthly costs (P&I) if I proceed with a garage. Have you noticed an big enough difference in rent price dependent on having a garage? IS IT WORTH IT!?
Thank you! I am looking forward to your experience.
Why would it cost an additional $200 - $300 in mortgage payments? I think you should be able to add a two-car garage for around $10,000. If you add that amount to your mortgage it should only increase the monthly payment by around $45. You can likely increase rent $100 - $150 a month so I say it's worth it.
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William Hochstedler
Broker · Logan, UT · Member since 2013 · 1k+ posts · 1k+ votes
7y
@Reed Udy
We haven't found that we can get a lot more rent from garages. But very few multi's have them. When tenants fill them with their stuff and have no alternatives, they stay forever. Most properties I know with garages tend to have very long-term tenants.
I don't know how you factor this into your numbers but turnover costs (and vacancies) could go to zero. In a rural area that might take a bit longer to re-rent this could save a lot.
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Quito Keutla
Real Estate Agent · Renton, WA · Member since 2017 · 204 posts · 151 votes
7y
@Reed Udy with all things being equal, most tenants would choose one with a garage. I’m assuming this is a hold strategy so it will pay for itself over time. Not to mention resell wise would make it more desirable. Happy Investing!!
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Ryan Mertens
Developer · Holladay · Member since 2019 · 64 posts · 36 votes
7y
People in rural Utah have lots of toys. They need a place to store those toys. I wouldn’t think of building without the garage ever. It’s going to be the cheapest part of the build
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Pamela Sandberg
Realtor / Attorney · Phoenix, AZ · Member since 2018 · 388 posts · 265 votes
7y
Absolutely agree with everything said! (added rental value, rural Utahns and their toys, etc.)
Would also add this: think about your resale value if/when you eventually sell the rental properties. Will it be too hard to sell the property without a garage? What will the added value be at the time of sale?
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