Converting a Spare Bedroom into Office Space

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Converting a Spare Bedroom into Office Space

Chris Sweeney
Investor · Ambler, PA · Member since 2016 · 28 posts · 2 votes

Hello Everyone,

I have a 4-plex that has a spare bedroom off of the second floor hallway. It's 104 square feet, bright with 2 windows, and has no rooms adjacent to it (only the hallway) so it's quiet. I'd love to be able to monetize this room in some way, and I think it would make a great small office.

My first thought holding me back - the legality of it. The building is zoned for 4 residential living units, but does that mean I can't rent this extra room out as additional storage or as office space or an artist's studio or whatever? Would that extra room be considered a 5th unit and be illegal? Maybe? But let's be real. People are doing it all the time by renting out their garages (which I understand doesn't make it legal). For example, a duplex I have elsewhere has 2 living units plus 2 garages. I plan on renting those garages out at some point, and I doubt anyone would ever say anything to me for having 4 tenants on a 2-unit property.

My second thought - no bathroom. I don't know if a bathroom would be required legally or not, but I think as long as that is disclosed in the rental listing and the tenant knows exactly what they're getting, I don't see it being a big deal. For example, if I were, say, a small accountant or a small part-time therapist or something, and would only see a couple clients per day and would otherwise be in and out of the office, I might not care if there's a bathroom or not.

Any thoughts on this, or any ideas on other ways I could monetize this room? Thanks!

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  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    7y

    There would have to be access to a bathroom if you expect anyone to spend a workday there. What would they do, drive to a local gas station every few hours?

    Do you have adequate parking?

    How would you handle utilities, just include it in the rent?

    Does the room have an outside entrance or would the "tenant" have access to the house?

    What about liability insurance for the office's clients if any?

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  • Chris Sweeney
    OP
    Investor · Ambler, PA · Member since 2016 · 28 posts · 2 votes
    7y
    Originally posted by @John Teachout:

    There would have to be access to a bathroom if you expect anyone to spend a workday there. What would they do, drive to a local gas station every few hours?

    Do you have adequate parking?

    How would you handle utilities, just include it in the rent?

    Does the room have an outside entrance or would the "tenant" have access to the house?

    What about liability insurance for the office's clients if any?

    Those are all great questions, so thanks for helping me brainstorm.

    Yes, the bathroom issue stinks. The tenant would have to go somewhere else. But like I said, if they know that before renting the space and are okay with that, then I'm not too worried about it. Obviously it makes the space less appealing and less marketable, but perhaps somebody just needs a space to use for an hour or two at a time to meet with clients. The alternative would be using their home (which they don't have the space for, or it's too loud because of their kids and barking dogs, or there's no parking, etc.). This tenant would be happy to pay $300 for this space as opposed to $700 for one that has access to a bathroom.

    Parking - yes there is plenty of parking on-street during the work day, and we are currently adding onto the driveway to allow 6 cars to park.

    Utilities - The heat is just one huge forced-air system for the whole building, so we'd have to include that. There's already a supply vent in that room. And the electricity is on the common area breaker, so we'd end up including that too.

    There would be no outside entrance directly to the room. The tenant would have to come into the main front entrance (which has an electronic keypad deadbolt), through the common area hallway, and up the common area steps.

    Liability insurance - would our current policy not cover the tenants guests? Even if it did, I suppose the best idea would be to require the tenant to have their own insurance and add the owners of the property as additional insureds on the tenant's policy. I wonder if that's common in those shared office space buildings.

    I agree, it might not be able an ideal office space, but it might work for someone, or perhaps there is something else we could use the space for to monetize it.

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  • Brian Hamel
    Nashua, NH · Member since 2017 · 66 posts · 58 votes
    7y

    @Chris Sweeney seems like you would be required to put on handicapped access if you made it a commercial space including a bathroom, larger doors and a way for a wheel chair to get up the stairs.

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  • Chris Sweeney
    OP
    Investor · Ambler, PA · Member since 2016 · 28 posts · 2 votes
    7y
    Originally posted by @Brian Hamel:

    @Chris Sweeney seems like you would be required to put on handicapped access if you made it a commercial space including a bathroom, larger doors and a way for a wheel chair to get up the stairs.

    You may be right, which would make it a no-go for me. That's just not doable. In that case, I think I'd just try to offer the space to current tenants for them to use as additional storage or something.

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  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    7y
    What about making it available for rent in conjunction with one of your other units in the building? ie, you get the apartment and this office/storage space for $xx per month. Possibly one of your existing tenants would have a use for it. Or.... if a turnover comes up, market that unit with the additional room. People routinely pay $50 per month or more for storage, so a climate controlled space would have some value for that purpose too. Keep thinking about it and you should be able to turn this into a cash generator.
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  • Max T.
    Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
    7y

    My first thought would be to convert it into a coin operated laundry room for all tenants to use. If you already have laundry facilities on site then my next suggestion would be what @John Teachout said - convert to additional storage space. 

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