I have a SF property in a nice quiet neighborhood that has a 2+ car detatched garage that the tenant doesn't use. The other day I asked if the tenant minded if we rent out the garage. He had no problems with it. (I know I don't need to get permission from my tenant, but felt that since he's been there two years, it was a courtesy to ask him).

So I would like to know if others on this forum rent out garage space? If so, how would I determine the value of that space?

Is there any "legal" due diligence I should do before offering it for rent?

The garage has two separate doors and the rear used to be a workshop. Each side is 9 1/2 feet wide and 27' deep. Would you put a wall between the doors and rent out each side, or just the entire structure?

Looking for more cash flow as learned from the Mr. Landlord Convention this year.

Thank you for any assistance that can be offered.

I would sign a new lease with the tenant of the house explicitly stating that the garage is not included in their rent and that you may rent it to others or use for yourself.

Review laws to see if this garage rental would be covered by commercial LLT laws or storage unit laws. Are there any other considerations related to this - taxes, etc.

I disagree with your statement you dont need permission from the tenant.

Unless your lease specifically stated the garage was excluded.

Make an addendum to the lease or at least an email in writing from the tenant.

If ever a disagreement with tenant they will have something over your head.

That said. I would find out what the local storage units charge. And consider 75% to 50% of that amount.

I was going to mention the "I don't need to get permission from my tenant" bit as well.

We had the conversation recently about whether or not a ll and their friends has full use of a tenant's driveway for sporting events. It turned out that no, if the tenant says, "Don't park there," unless there's some sort of language in the lease that says "ll reserves the right for them and their friends to park here on gameday", you've got to either park in the street or go use a pay lot. (The tenant gave permission for 1 vehicle, but no overnight, but the ll was still upset.)

So if a tenant can exclude the ll from use of something as ordinary as a driveway, a tenant can definitely exclude the ll from renting out part of the premises to a third party, unless the ll has specifically reserved that right in the lease, regardless of whether or not the tenant is actively using that part of the premises.

Be very careful. Even though this guy may be perfectly okay with you renting out the garage separately, it may be difficult for you to find his successor, once your prospects realize the detached garage doesn't come with the house.

Tris,

We have several like this.

I actually learned it from the Sec8 inspector! She said the Sec8 rent does not have to include a detached garage. Got me thinking!

-house lease must exclude the garage AND have language about not blocking that garage and no work to be done in the garage so it does not become someone's noisy shop.

-I have 3 detached garages *I* use and have excluded from the house.

-we use our normal house lease.

-this might limit your ability to re-rent the house later.

-we first offer the garage to the house resident at a reduced cost and they usually take it. 1 car is $75 reduced to $50 for the house res. 2 car is $100 reduced to $75 for the res.

Most stay rented indefinitely.

A wealthy and rather honest friend of mine was looking for garage or even just a parking space to rent in North Berkeley and wanted to pay top dollar or over $200 a month. Another friend and her husband pay well over $1000 a month for a converted the garage in San Bruno, and the owner lives in the house. In a capital of a province in a Southern Italy, a friend of mine paid an owner of a tiny garage a bunch of money each month to park his equally tiny car, and I'm sure that no one signed a contract.

If you can manage, follow local laws, and collect, then you can design or craft your policy on renting your garage. Be strong and smart and best of luck.

You need to have it in your rental agreement that the garage is not included with the tenant's house.

I suggest storage only. There are environmental issues with working on cars and if someone is working with power tools, like maybe a wood shop, your tenant is going to be soon complaining of noise.