Adding storage units to 6-unit multi-family home?

[Taylor Green]

Hi,

I was wondering if it is worth the cost to add storage units in unused space at a smaller multi-family property...

I have no knowledge of how to do this, I'm assuming you have to get permits from the city to make sure it's allowed. I am just curious if it would increase the NOI of the property? Thanks.

[Adam Johnson]

I'm not sure how much space you have to work with, so I am going to throw out a couple more ideas to consider.

For my properties that have garage spaces or sheds, I will "rent" that space for a monthly fee, say $ 50 or so (I know that's low, but follow with me). This space ONLY gets rented to the tenant that takes me up on my offer to cut the grass and shovel the snow. Not coincidentally, I "pay" them $ 50/month to do so. I simply credit it on the books if they do what they say they will do. I write up separate agreements so that if they default on the grass cutting and I have to do it, I can enforce the agreement separate from the living unit, which is subject to different laws. The reason I keep the fee low is that if they decide they would rather have cash than the garage space, then I am not stuck paying out a lot. This hasn't ever happened (yet), but I like to cover my bases.

Another idea that has worked really well for me is coin-op laundry rooms. I put one in a 5-unit (all 1 BR and a studio) that has ok. I recently put one in a 4-unit (three 2 BR's and a 3 BR) and it has done extremely well! One washer, one dryer is plenty. Set the price at about the same price as the local laundromat, convenience will win, who wants to haul their laundry to the laundromat when they can just walk to the laundry room? These are run off of the house utility meters. The 4-unit didn't have a house water meter. Instead, it had 4 meters, 1 for each apt. I simply included the water in the rent for one of the apartments (marking the price up accordingly) and tapped that one for the washer.

For the laundry rooms, I took it one step further. I learned that some larger apartment complexes let an outside company set their machines up in the laundry room of the complex. The complex gets 1/2, the outside company gets 1/2 of the take. The complex pays the utilities, the company maintains the machines. Instead, my kids bought the machines. We are teaching them to save/invest and they had just enough saved up from holidays, birthdays, and allowance to buy the machines. So they are "the company". Works great for all and the tenants love the convenience.

The laundry rooms need very little space. Big enough for 2 machines (they make stackable coin machines too if space is a problem) and to open/close the door. They can sort/fold in their apartment. Keeping it small discourages loitering and makes it easier to keep clean too.