The garage tends to be a place where junk gathers dust. However, if you're a landlord: Have you thought about converting this underutilized space into a rental property to generate additional income each month?
More people than you think might be interested in leasing your garage for a variety of purposes: to park an antique car, motorcycle, or four-wheeler; use it as a storage unit; provide a rehearsal space for local bands; or even transform it into a studio apartment.
Regardless of what a potential tenant might use it for, these guidelines can help you to upgrade your garage into an appealing, versatile space with significant potential ROI.
The cost of turning a garage into a rental property, or part of a rental property will fluctuate significantly depending on the garage's current condition and future purpose. Depending on your plan, a garage renovation could cost between $3,000–$30,000. If you have to completely overhaul the space (adding plumbing, electricity, and the like), the cost will be at the higher end of the range.
Keep contractor fees in mind, which are a major factor in the costs of turning a garage into a rental property. Most contractors charge a flat fee based on 10–20% of the final project cost. Hourly builders earn an average of around $15 per hour.
The first step in turning a garage into a rental property is getting an estimate of the work that you want done. You can then determine what's important to do now and what can wait until later.
In addition, consider the tasks that you can do-it-yourself in turning a garage into a rental property for a lower cost. Here are a few things you probably didn't realize you can do on your own.
New epoxy flooring: You can apply epoxy floor paint yourself. Plus, it's easy to clean, can take a lot of wear and tear, and can brighten up your space for a relatively low cost. It's also great for people who struggle with allergies. Many people with asthma or allergies opt for epoxy floors, because it seals the concrete and provides lower levels of dust and allergens.
New light fixtures: Once the wiring has been completed, selecting the right fixtures can literally cast your garage in a new light—and you can spend as much or as little as you want.
New "walls": Instead of building walls, divide the space with standing separators. Wayfair has a wide variety of dividers that can increase the style and function of your space.
When you're deciding how much rent to charge, there are multiple factors to consider. For example, you should take into account how much square footage you're offering, whether the garage is climate controlled, and where it's located. When turning a garage into a rental property, you should know that garages in urban settings will be higher on the price bracket than garages in rural or suburban areas.
As a general benchmark, think of the space as a storage unit, and adjust the rent accordingly. Determine what is reasonable to charge per month and still generate a profit. You can (and should) also contact a leasing agent or talk with another garage rental landlord for insights into the going rates where you live.
Before making the garage available to renters, take a serious look at the space's security. Can it truly keep your home, your tenant, and their belongings secure? There are 3 main points of vulnerability to consider when you're turning a garage into a rental property: the garage door, any other doors to the outside, and the interior door from the garage to your home.
Garage door: Verify the door openers and keypad functions are in excellent working condition: "As a landlord, you're responsible for their occupancy; you don't want to be held accountable for any accidents and injuries that happen within your property."
Exterior door: What are the locks like on any doors to the outside? If they're old, consider upgrading to something new and more secure. A keyless, digital lock is a great option for tenants-when someone moves out, you simply reset the code.
Interior door: If the tenant will not be utilizing your home space--i.e. sharing the kitchen or bathroom--make sure that your interior door has a secure lock on it. While you'd like to trust your tenant, you never know who they'll have over; and keeping your home secure has to come first. Consider upgrading this lock and installing curtains in any door windows (if you have them).
If you're in the market for a simple and practical means of increasing your cash flow, rent your garage to friends, relatives, or neighbors. Don't forget to consider your safety and finances before promoting the space to anyone.