Renting a Garage - what do I need to know?

Question

Hello BP!  Been awhile since I posted.  We have been very busy with our 2 duplexes we purchased within a week of each other!

Anyway, our one duplex actually has a 4 car garage (2 2-car garages for each unit) and it also has an additional narrow garage along the back that goes the length of the building (approx. 12x45-ish... didn't measure, could be slightly bigger).  Anyway, we are going to rent this additional garage space out for additional income on the property.  Planning on charging $200/mo because of the size but what should I know about renting a space like this?  Do I really need to screen the renter?  Should I require a 3 month lease or is month to month pretty standard?  Should I require a deposit of any kind?  Do I need to draw up a formal lease for them to sign or can I find one somewhere?  Also any wise words would be nice.

Thanks!

Al Williamson · Answer

@Sarah Miller good idea to rent out the extra space. Be aware that you are now need a lease the is based in the lien laws - not the landlord tenant laws.

Read up on the lien laws in your area. You could cheat by grabbing a contract from your local mini storage.

You are entering the arena where you can lock out a non paying storage tenant and sell off their things. For that reason, I like the concept of not renting the space to your resident.

Sarah Miller · Answer

thanks for pointing this out Jim!

Jim Blatchley · Answer

@Sarah Miller  The following is from the Ohio law link from above:

Title [53] LIII REAL PROPERTY

Chapter 5322: STORAGE FACILITIES

5322.01 Storage facility definitions.

As used in sections 5322.01 to 5322.05 of the Revised Code:

(A)  "Self-service storage facility" means any real property that is  designed and used only for the purpose of renting or leasing individual  storage space in the facility under the following conditions:

(1) The occupants have access to the storage space only for the purpose of storing and removing personal property .

(2)  The owner does not issue a warehouse receipt, bill of lading, or other  document of title, as defined in section 1301.201 of the Revised Code,  for the personal property stored in the storage space

"Self-service  storage facility" does not include any garage used principally for  parking motor vehicles, any garage or storage area in a private  residence, an establishment licensed pursuant to sections 915.14 to  915.24 of the Revised Code, or any property of a bank or savings and  loan association that contains vaults, safe deposit boxes, or other  receptacles for the uses, purposes, and benefits of the bank's or  savings and loan association's customers.

If I'm understanding this correctly, then most of the advice above relating to Self Storage would be incorrect. You should probably either do more research for your state laws regarding a garage/residential storage area or consult an attorney.

Good luck.

Sarah Miller · Answer

Scott, thank you.  I am saving this link.  However, I am still confused as to how I am supposed to open the garage if I do not give myself a key?!  If I do have a renter who is 60 days late with rent, and I put on an additional lock, and I want to sell everything inside to satisfy the lien, do I have to just hope the renter will come and take THEIR lock off so I can get inside?!  That seems a little absurd and asking for confrontation/non-compliance.

Scott Meyers · Answer

Here's the law for Ohio Sarah: http://www.storagelienlaws.com/index.php/14-self-storage-lien-law/20-ohio-storage-law

Roy N. · Answer

Sarah:

Scott is correct in that you should check and follow the law in your local jurisdiction.  In my initial response, I focussed solely on the regaining access element and not the procedural requirements.

Scott:

On a commercial/storage rental here, we do not have a 90-day wait period.  Our garage/storage rooms have a second deadbolt/lock which we simply lock when rent is late {rent is late on the 2nd of the month, we lock on the 4th} and there has been no contact from the tenant.  After 30-days we can change the locks /remove the contents.

But it is a good reminder, to highlight the need to confirm to local jurisdictional laws/requirements when responding.

Scott Meyers · Answer

Sarah - DO NOT DRILL THE LOCK OR CALL THE LOCKSMITH - as Roy has suggested (another reason to be careful where you get your advice).

You put an OVERLOCK on it - meaning, you place a second, additional lock on the garage so that it has to be removed in addition to his.

As for the timeframes:  rent is due on the 1st, late on the 5th, on the 6th, you overlock and begin the lien process.  Most states give 90 days before auction - at which time you continue to charge rent and late fees, then sell their stuff to cover the cost.

Sarah Miller · Answer

Sounds good. Thanks! Hopefully I can get a renter because it will really increase my cap rate!

Roy N. · Answer

Drill the lock or call a locksmith.  Either way, the cost of gaining access and replacing the lock would be added to the tenants costs.   If it has a garage door, put a hasp on it and allow the renter to use their own padlock.

Renting a Garage - what do I need to know?

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