With many homeowners’ spending power getting squeezed from the economy, or from sapped equity from the market downtown in previous years, many are becoming more creative in finding ways to make their home more affordable and produce cash flow in unique ways.
Many of these ideas could be implemented not only in investment properties, but in your primary residence as well, although the level of commitment and comfort could vary. If your property is a townhome or condominium, you may want to verify whether these would be acceptable by the home owners association as well.
Garage: This has been popular method for producing cash, especially in metropolitan areas where street parking is difficult. Rents can vary greatly depending on area, street parking situation and demand. Typically in Chicago, an owner can rent their garage for $200-300 around the downtown area, and $150-250 throughout many nearby neighborhoods. Garages with heating can fetch slightly more. Many garages in Chicago are typically detached; so many people are comfortable with this option.
Owners with parking pads or spaces can also rent their parking spots out as well, although they may fetch a slightly lower price due to exposure to the elements and possible security.
Bedrooms: There are many websites and applications where home owners can rent out single bedrooms, for any duration – from one night to a few weeks. For primary residences, this takes a higher level of comfort and commitment, as you will be having a stranger “live” with you for that amount of time. The idea (and business model for many of these apps and websites) is that you are letting rooms out, offering a more personalized and cost effective alternative to hotels.
Depending on the amenities of your home, location and accessibility to areas of the city that may be in demand by potential guests, rates can vary greatly. Those considering this option may want to verify the screening methods of guests by the service they use, or have their own. You may also want to speak to your insurance broker as well. Some associations or municipalities may have special restrictions.
I have seen this option used by individuals who have bedroom spaces slightly separated from the main home, such as a coach house, above the garage bedroom, or split floor plan style home where your typical patterns at home are minimized by such guests.
Lower Levels: This can be anything from two steps below grade, to a traditional basement. Just like the above, except in many cases, the duration is significantly shorter or longer. Many lower levels are rented out in “vanilla box” condition, meaning that are not finished to the same degree as the rest of the home. In most cases, drywall (unpainted), light fixtures and plumbing is installed. The idea merges the concept of commercial space rentals, and placing it in unneeded areas of the home with more flexible terms.
Tenants looking to rent these types of spaces out are typically looking for either a few hours or a few weeks/months. From my experience, I have seen photographers and artists who need a space temporarily, to businesses who are waiting for formal spaces to be finished.
This is a much savvier concept and takes a high level of commitment. If lending your car to a friend bothers you, this is definitely not for you. If a business is renting the space out, there will be required insurance on both sides. There may be possible restrictions depending on length and other terms. You may also want to speak to an attorney with any questions, but businesses with “customers” are a definite no no.
If renting out to artists or startups isn’t your preferred method, unfinished lower levels are also great as storage spaces.
Kitchens and Living areas: If renting to artists intrigued you, many individuals rent out their home for photo shoots. Many have a preconceived notion that they need to ultra-luxe home to be considered, but there is a need for many different types of homes. Sometimes the photographer is an emerging artists and looking for something affordable versus something fabulous.
This is not a typical lease type agreement so consult with your attorney before making decisions. There should appropriate insurance and general liability on both sides to cover not only the items in your home, but potential equipment being brought on site. You may also want to verify the number of people as many photographers travel with an assistant, lighting person(s), makeup artists, and the model(s) being photographed.