Are Storage Sheds Worth the Investment for Your Rental Property?
Giving your tenants a little extra storage space for their belongings may help with attracting and retaining quality tenants. But property owners may wonder if adding a storage shed to a single-family rental property makes financial sense as well. Installing a shed represents a significant upfront cost, but like most other investments, if the returns are strong there may be a good reason to spend the money. At the same time, there may be building permits, association approvals necessary, set back requirements, and properties in certain markets may not benefit from the addition of a storage shed at all. This is why before deciding whether or not to add a storage shed to your rental home, it is important to consider all of the financial aspects of doing so.
Most industry experts agree that a shed does not add much to your property values. While it may look attractive and add some extra space, the real payoff comes from whether or not a storage shed on your rental property will help you attract and retain tenants, and at what rental rate. Single-family rental homes are often perfect for long-term renters, those who plan to stay in the home and the area for many years. In these cases, providing little extras to make their stay easier and more comfortable may encourage your tenant to want to stay even longer, enabling you to expect a stable long-term rental income.
Tenants looking for a comfortable rental home may find strong appeal in having some extra storage space and be willing to pay a little extra for the convenience. Particularly if the home itself doesn’t have a large garage, many closets, or storage areas, a shed may be the difference between easily attracting a quality tenant or struggling to lease your property. Tenants with a lot of personal belongings may be equally drawn to a property with a shed, saving them the cost of renting a storage unit in an off-site facility. Even a slightly higher rent will look like a bargain to these renters, who will enjoy having all of their personal items stored safely on the property. On the other hand, rental homes in certain locations may not make adding a storage shed a wise choice. Depending on who your target renter demographic is, you may find that a storage shed is neither wanted nor used.
An increasing number of renters are embracing a simplified lifestyle, reducing the number of personal possessions. Others are contracting out basic home maintenance services, eliminating the need to store garden tools and other items. Especially if these renters are young adults, they may not see much use for a storage shed and be unwilling to pay a bit more for a property that has one.
There are a few pitfalls for property owners to keep in mind, as well. Storage sheds can sometimes invite trouble, and they do require regular maintenance. If your tenant has filled the shed to the ceiling with personal items, it may make performing routine maintenance very difficult. Storage sheds can also become a problem if your tenant creates a hoard of personal items that may attract insects and rodents onto the property. This could potentially increase the cost of property repair and maintenance, while ultimately having a negative effect on the value of your property.
Under the right circumstances, adding a storage shed to a single-family rental property can be a sound financial decision. But careful analysis of your market and target renter demographic is an important first step before choosing one way or the other. At Real Property Management, we can help make that choice easier by providing quality information about your market and your property’s potential. Contact your nearest Real Property Management office today for more information.