Double Garage Problem

I have just bought a unit which I am renovating and will be ready for rent in a couple of weeks. It has a double garage and they are divided by a brick wall (ie) they are completely separate from each other. In order to maximise my return I am aiming to offer the right tenant the following. If they want to rent the unit and one garage they can have it for $ X,XX Per week
I then want to say them that if they want the extra garage they can have it for $ X,XX + an extra $30 Per week. If they say I only want 1 garage I will tell them that the other will be advertised as storage. So my question is:
1. Is there any illiegal about this? ie Can I have 2 leases on the one unit?
2. If I rent out the 2nd garage separately for storage, will the main tenant complain that the electricity (although small) being used by the storage user is being billed to them ('cause it is)?I figure that if I offer these scenarios to the tenant, at least they can't come back later and say" Why did you not give the 2nd garage?"
Why is everyone's opinion on this(especially the electricity issue). Does someone have a different approach?

Thanks

Jester
 
I don't see a problem with what you're proposing, at all.

The one thing I do suggest is that you are upfront with the unit lease with respect to the electricity use.

I would write it into the lease to say that there is electricity used in the other garage, but it is restricted to one light, and that the anticipated cost of this light will be $xx per year. And, that this cost has been taken into account when setting the rent for the unit. So that, later down the track, the unit leasee can't come back and say that it's costing them money.

As the incoming leasee, I would be wary if there was an electrical outlet in the garage, since my paranoyd side would be worried someone would rent the place to use as a welding shed.... on my power bill...

This is probably something you'll want to address if, in fact, there are outlets in there.

asy :D
 
PM is about control. It is easier PM if all the property is under the one lease. I would prefer to rent the unit and both garages to the same tenant, without permission to sublease, ;) so that if the tenant did sublease one garage (I would pretend not to know) and later leave, I would have no problems regaining possession of the "spare" garage he rented to someone else in the block/street/suburb. Only one rent to collect, one tenant to deal with. Also, any tenant with 2 cars is showing a better socio-economic profile than a tenant with one car or none. It's not easy to find a unit with 2 garages, offer it to the market at a premium, with this extra desireable feature. :D
good luck ;)
cheers
crest133
 
I agree with Crest133 on this one. If it were not for the shared electricity scenario then it might have been worth renting out the second garage, but even then I personally would rather rent the complete property to one tenant. A double garage is a plus and should attract a premium. Sharing facilities/costs between two tenants can be messy. Worst case scenario - what if the two tenants don't get along for any reason? You'll be piggy in the middle. If you decide to go with your original idea then make sure you follow asy's advice and get everything covered in the lease. investorgirl
 
Jester

Is it just a light in the garage or a power outlet also?
It is probable that if it is just a light then it is part of the common area and not charged to the unit. Is it a block of units or townhouse type unit?

You could find out from the body corporate probably.


Regards

Adrian See
 
There is also a power outlet. But an interesting point you raised is that maybe/possibly, the electricity from the light in the garage is charged to strata. Hmmmm I must investigate this. I would'nt have thought so though as the light in the garage is "inside" the garage which one would have thought is part of "my" property and not the common building.
 
Jester,

I had this exact situation sevaral years ago when managing a property for one of my landlords. The unit was let out as a single garage and compensated with a slighly reduced rent for the electricity that maybe used from the second garage light. With regards to the powerpoint we put a cap on it and locked it up so it could not be used.

Yes it is easily done, as long as you are up front with everybody.

Jarrod
Jarrod Lane Real Estate :)
 
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