More yard or more parking to maximize rental property income

More yard or more parking to maximize rental property income

Seattle, WA · Member since 2016 · 14 posts · 6 votes

Hi BP community!

My wife and I just bought a home around the Morgan Street Junction in West Seattle. It is a small, old house on a small (4k sqft) lot. It is zoned commercial and LR2. We definitely plan to develop it in the future but as for now, we plan to live in it and fix it up. I assume we will be here for 3-5 years. After we move, I think we will just rent it as a rental house (instead of selling or developing right away) unless we have decided otherwise by then. 

My question is: since the lot is tiny, we are trying to figure out the best layout for the backyard to make it more valuable to renters. Currently, there is a single car garage on the south side of the property, a parking spot just north of that, then a garden just north of the parking spot. Those three items currently take up the vast majority of the back yard and since the wife and I have a little one, we are contemplating taking out the parking spot north of the shed and fencing the whole back yard in and build some nice garden beds. The single car garage is only 18.5 feet on the inside so most small SUVs and cars will fit but full size pickups will not. I am curious out of your experiences, would you recommend keeping both a garage and a parking space? Or do you find in areas like West Seattle that a slightly larger backyard would be more useful (and therefore bring in more rental income) than 2 parking spots on the premises? There is currently plenty of street parking but as more and more duplexes and town homes go up, I am sure that number will continue to dwindle. 

Any information is appreciated!

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Real Estate Broker · Seattle, WA · Member since 2014 · 1k+ posts · 427 votes
9y

Some things to think about.

Is there a driveway in front of the garage?

Do you need 2 parking spaces or do you want a nice backyard?

Since you are going to be living there, let's think about that first.  

For purely rental purposes with a plan to re-develop in the future, I would not invest too much into the property. 

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  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    9y

    I don't know your area and 4000 is a small lot.  Here for a property like that onstreet parking is restricted when there is snow so  you would not lose a parking space so you only had one on property space. However, you may not have that issue.  What Is the size of the house  (bedrooms) and what is the on street parking like?  Is there a possibility to maximize flexibility,  a patio that you could park on if needed?  If you have plenty of on street parking and you aren't fencing the garage so you can't use it for parking you could be fine.  

  • JD MartinBusiness Member
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    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
    9y

    Without knowing anything about the Seattle market, here I would keep the second parking spot. Most renters here prefer to park on their own property than to park on the street. Off-street parking is highly sought after here. I think it's more likely that a rental house will have two cars than it will be to have people who'd rather have an extra 200 SF of yard. 

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  • Real Estate Broker · Seattle, WA · Member since 2014 · 1k+ posts · 427 votes
    9y

    Some things to think about.

    Is there a driveway in front of the garage?

    Do you need 2 parking spaces or do you want a nice backyard?

    Since you are going to be living there, let's think about that first.  

    For purely rental purposes with a plan to re-develop in the future, I would not invest too much into the property. 

  • Rental Property Investor · Everett, WA · Member since 2013 · 389 posts · 222 votes
    9y

    @Jacob Wyatt congrats and welcome to the neighborhood! I am just up the street in the Gatewood neighborhood. You definitely picked up a valuable property with the HALA planning going down the road. 

    I would put in your backyard and enjoy it will you live there. Two off-street parking spots won't be a big deal for a small house. You will likely rent to folks that only have one car since it is a small home in Seattle. With all the public transportation available and the cost of parking in downtown and other area that folks work, it is more and mOre common to only have one vehicle per household. Even if they have two cars many competing rentals won't offer more than one off street spots around here.

  • Investor · Seattle, WA · Member since 2015 · 48 posts · 44 votes
    9y

    Have you considered renting out your garage?  Lots of people need storage space for their 'stuff'.   Even when you rent the house, you could rent the garage to someone other than the tenant.  So you could have a little bit of income now and when you turn it into a rental, you would be able to maximize cash flow.  Keeping the parking spot now would be better in that situation as you would want to have a parking spot for your tenant.  

  • Seattle, WA · Member since 2016 · 14 posts · 6 votes
    9y

    Thanks everyone for the helpful and thoughtful responses! 

    @Colleen F. : The size of the house is about 1000 sqft with an unfinished half basement (but has legal ceiling height) and half crawl space. Upstairs is two bedrooms and one bathroom. Street parking is always available but since two of the neighbors just put three units on their 4000 sqft lots, parking is more limited in the evenings. 

    @JD Martin : I am certainly now leaning more towards keeping the parking space and readjusting the garden area and front yard situation to create a little more grass and space.

    @Adrian Chu : I have a hard time finding how much to invest into this home because although I am sure that I will develop in the future, I do not know when that time will come (especially since it is my primary residence). My gut tells me we will be here for 5 years and rent it for 5-10 years before we develop. 

    @Account Closed : I have never considered your idea and think it's brilliant. My garage is around 240 sqft. Do you have any ideas of what this would be worth monthly to "space renters" in Seattle? 

  • Investor · Seattle, WA · Member since 2015 · 48 posts · 44 votes
    9y

    Not sure on what a garage would go for in that area.  Check local storage unit pricing.  You can also look on craigslist for what garage rentals are going for.  Keep in mind that landlord tenant law is different for 'storage units'.  Their are rules around how you dispose of tenant property if they stop paying.  

  • Real Estate Agent · Seattle, WA · Member since 2016 · 34 posts · 5 votes
    9y

    I would be inclined to try to cost effectively turn the extra parking spot into an outdoor patio for your own usage but not tear up concrete if that is what you were thinking. I think most renters are happy with one parking spot. Renting the garage is definitely an option. I find that a lot of landlords in Seattle either keep the garage for their own items, rent it out, or ask for extra $ from the tenant in order to use it. I had a client in Ballard who only had one parking spot on a 3200sf lot and had covered it with beauty bark and added a fence to enclose it. It was fine for her and her dog but when we went to sell it people's biggest concern was the lack of parking so we removed that portion of fence and mentioned that it had previously been a driveway/parking spot. Depending on the composition of the ground you could lay pavers and plant grass or ground cover in between them. I am actually wanting to get rid of grass on my property, less work for you or tenants is best.

  • Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
    9y

    Yards cost money every month to maintain. Parking is a convenience. I own one property with no yard and not enough parking. I've never had a tenant applicant ask if it has a yard. They always ask about the parking situation. Just don't rent to people with dogs. 

    If you're going to live there, I'd probably go with the yard and then turn it into parking before I moved out.

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