Summary: Renting out storage space is one of the best ways to tap into hidden value and generate extra income from your rental property. Neighbor.com is a great platform for rental property owners to earn extra income by renting out any extra space they have that could serve as a storage space.
[Disclaimer: We are not accountants, lawyers, or financial advisors, so please consult your own team of professionals about the topics covered in this article.]
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Hidden value is one of our favorite topics. It’s how you boost your cashflow and force appreciation. Most investors miss these opportunities because they’re not diligently searching for them when they’re looking for rental properties to buy.
Many investors in our community are constantly on the lookout for these opportunities. One example of hidden value is renting out storage spaces. While this might sound good in theory, investors often ask the question, where do you market for storage spaces? Also, they wonder, what is the demand for these storage units?
In this article, we share our experience using Neighbor.com to market storage spaces. We also share our insights on the demand in our market.
This article is focused on the owner’s experience on Neighbor.com. This is based on our experience in one market. If you have storage space to rent, this article can be very beneficial for you. However, in this article, we will not be discussing the experience from a tenant’s perspective.
What is Neighbor.com?
Some call it the Airbnb of storage. Neighbor.com is a website and app that has an Airbnb-style business model. As the property owner, you are the host. As the host you can rent out a space for various reasons including: self storage, car storage, RV storage, boat storage, trailer storage, or business inventory.
Is it Available in All Markets?
No, it’s not available in every city in the United States at this time. It is available in some markets. However, it is available in every state in the United States. The available cities are listed on their website. To see if Neighbor.com is in your city, you just have to select the state where the property is located, and then the list of available cities will be displayed.
How Does it Work?
Neighbor.com is fairly user friendly. As a host, to get started, click on the tab that says Become a host which is located on the top right on the homepage. You will then be prompted to List Your Space which is when you can create your account.
Once you create your account, you will be able to start your listing. You will be asked questions about the space, such as the address, the size of the space, the specific features your space offers; such as, is it a private space? Is your space climate controlled? Is it pet free? Smoke free? Are their security cameras at the property? These are all important attributes to showcase your space. You will also be asked what kind of accessibility the renters will have to the space. Can they access the space whenever they need to? Or will they need to contact you every time they need to visit? Is the property occupied?
Neighbor.com helps you strategize how to list your space. You will be given a recommended price for your space based on its size and location. You will also be asked if you want to give a discount on the first month, which we recommend. As we have done this each time our space has become available and we have had interest from multiple would-be tenants right away.
Payment Details
In our experience, we have not had any issues with payment processing. On the owner’s side, we provide our bank information to receive payments from the tenants. On the tenant side, Neighbor.com uses Stripe to handle all payment processing.
Overall Experience For Host
The overall experience for the host depends on how diligent you are when preparing to rent out your space and how you communicate with your tenant. To attract the best tenants, make sure you start off by taking the best photos of the space and featuring them in the listing. Make sure the area is clean and you have good lighting.
Once you have interest in your space, make sure you first read the person’s profile and get a good idea of what they want to store at your property. Please take note of the fact that Neighbor.com has a restricted items list, which can be found on their Terms of Service page. Restricted items include anything that can be harmful to others such as hazardous or flammable materials, and toxic chemicals.
Once you have identified a tenant, utilize the messaging portion of the app and get a feel for what the tenant is looking for. Then, organize a time for yourself or someone you trust (such as your property manager) to meet the potential tenant at the space. Since you will be meeting with a stranger, make sure to use caution as you would when meeting with any stranger.
The Good
There are many pros Neighbor.com has to offer which include:
- As the host, you have the right to inspect what is being stored in the space.
- The host has $1,000,000 in liability protection for any damages caused while renting out your space.
- Listing your space is free.
- You can tailor your space for a specific use, such as inventory storage or car storage.
- There is a fairly robust demand in our area for renting out extra space.
The Bad
There are also some cons to renting a space on Neighbor.com
- You have to have a way to get rid of the tenant if their payment method stops working. So have these mechanisms in place ahead of time.
- If you want a formal agreement between you and the tenant, you have to come up with the agreement yourself. Written agreements can include information such as stating if the tenant has unlimited access to the space or not.
- You have to pay a processing fee of 4.9% + $0.30 that is part of your monthly payout you can read about that here.
- You have to respond to each booking request within 48 hours, or else the booking will be declined.
- It’s a monthly rental, not a long term lease.
The Verdict
Overall, Neighbor.com has been a great way for us to market our storage space to generate extra income from our rental property. We were surprised at how much demand there is for storage space in our market.
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