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We’d all like a little extra cash, and when we can earn that income passively it’s even better. But we don’t all have spare houses to rent out on Airbnb or VRBO. However, if you’re someone who loves maximizing the space in your home, there’s a service that can net you a profit. We’re talking about Neighbor, a company that allows you to make use of that extra space by renting it out to someone who needs a little extra storage.
Neighbor is a lot more low-maintenance than say, Airbnb, and is a viable side hustle opportunity. While a single property won’t bring in thousands per month like it would with a short-term rental, you might be able to optimize anything from your driveway to your attic to bring in at least a couple hundred with a whole lot less work.
Here’s everything to consider before deciding to list your storage space on Neighbor. Before we get into it, be sure to download the KCL app for even more side hustle tips.
If you have space that can be used as storage, you can start earning money with Neighbor.
You can list all kinds of spaces on Neighbor. Like, if you have some space in your bedroom closet, you’re good to go.
Here are all the type of rental spaces Neighbor classifies on their website. Odds are, you’ve got a space that fits into one of these categories:
- Parking lot
- Self-storage unit
- Street parking space
- Shipping container
- Unpaved lot
You’re not limited to these categories, though. If you’ve got a spot where people can put their stuff, you can list it on Neighbor.
How much money you make with Neighbor storage rentals depends on your locale.
A lot of it comes down to where you’re located. The closer you are to a metro, the more renters there will be. That said, if you’re the only listing in your county, you may also get bites simply because there’s zero supply. It might not matter that there’s not as much demand because you’re the only game in town.
But you’re also limited by the cost of traditional storage in your area. If it’s cheaper for someone to do professional storage, they’re not likely to rent from a stranger’s house. Think Airbnb. Once it started getting pricey enough, more people started turning back to the traditional hotel experience.
Neighbor doesn’t cap how much you can charge. However, whether or not you actually get renters is going to depend on how closely you list your space to other similar options in your market.
For example, here in Pittsburgh, most of the rental listings for garages are somewhere between $150 – $300 per month. There’s one brave soul that listed their garage for $1,250 per month, but I don’t expect she’ll be getting a whole lot of bites on her listing.
Down in Fayetteville, North Carolina, where the sun shines for a larger span of the year and a singular snowflake can trigger school cancellations, garages only go for between $44 and $125.
TIP: You’ll start getting paid 30 days after the reservation starts. Then it’ll take anywhere between one and five days for your payment to process into your bank account.
Neighbor Storage will charge fees on your bookings.
It’s free to set up a host account and listing on Neighbor. But once you start getting bookings, you will incur some fees.
On every booking, there’s a processing fee. There are two parts to this fee. The first is a flat $0.30 on every single booking. The second part is a charge of 4.9% of the rental fee.
So if you’re renting out your garage for $300 per month, you won’t get the full $300. The 4.9% would equate to $14.70, plus another $0.30 for a grand total of $15 in processing fees.
Attract renters with great photos of your space.
The first thing you’ll want to do to get the attention of potential renters is to take accurate, great-looking photos, just like you would with an Airbnb listing. You’ll also want to get as detailed as possible on your listing description.
Once you’ve got your listing live, Neighbor gives you a “vouch link.” You send this link to family, friends, or anyone else who will sing praises of your space and personal integrity. The more people vouching for you, the more comfortable renters will feel booking your space.
A final tactic you can use to attract renters: on top of keeping your rates competitive for your market, give them the first month of storage for 50% off. This can be a good way to attract multimonth contracts. It will also make your listing look like one of the cheapest when people search for storage spaces in your area. That definitely attracts eyes.
There are three different options you can provide in terms of access to your space.
Neighbor gives you three options to present to renters who want to access your space. You can select if your space’s availability is:
- During set business hours
- By appointment only
Your preferences might vary depending on which type of space you’re renting. For example, if you’re renting out your prime real estate parking spot in the city, 24/7 access might be just fine.
But if it’s a closet in your bedroom? You’re gonna wanna limit foot traffic from random strangers.
Related: 8 Set-It and Forget-It Ways to Make Money with Your Car
Free cancellations are allowed in two instances.
There are two times renters are allowed to cancel their contract scot-free: Within 24 hours of booking, and at least three days before the reservation starts.
If they cancel at any other time, they’ll still be billed 20% of the original fee.
Hosts must provide 30 days notice if you want to end a rental agreement.
All Neighbor reservations are month-to-month. That means you as the host are supposed to give at least 30 days notice before kicking the renter out.
If you don’t, you’ll have to pay a $60 termination fee. You’ve gotta be careful because it’s not just the fee; if you cancel on enough renters, you could get kicked off the platform.
TIP: You can also cancel the contract at any time before the renter moves in. The renter will be refunded 100% of their money, though.
Payments are processed on the Neighbor platform, providing protection.
Neighbor offers Payment Protection, which is a program that makes sure you get paid even if the renter skips out on their bill.
You generally don’t have to worry about this, though, as all payments are processed on the Neighbor platform. They’re collecting payment details ahead of time and set up automatic payments for multimonth reservations.
Consider liability when offering up space on Neighbor.
When you’re renting out your space, you better believe there are some liability concerns.
Luckily, Neighbor does provide free insurance to their hosts. Bear in mind that this is secondary insurance, which means it’ll only be billed after your homeowner’s or renter’s insurance.
This policy covers you up to $1,000,000, but it doesn’t cover everything. It’ll pay for anything a renter may sue you for (personal liability). But it won’t cover things like:
- Damage to your property
- Deductibles for your homeowner’s or renter’s insurance policy
- Anything you get sued for that’s not related to a Neighbor storage reservation
Is this a business I could scale like Airbnb?
Maybe. The profit margin on Neighbor might be slimmer than it would be on Airbnb. First, the max you can list a storage space for per market demand is about the same as you might get per night with an Airbnb listing. So the revenue per listing is much smaller, but so is the initial investment. Not to mention the cleaning and maintenance costs.
Let’s say you invest in five shipping containers to plop down on your land in Pocatello, Idaho. You’re planning on renting them out for $100 per month each. But they each cost you $2,250. You wouldn’t break even until month 23, almost two years after making your initial investment.
And that’s assuming that all five shipping containers are fully booked that entire time. Odds are, they won’t be.
If the goal is to scale in an even bigger way where the business could sustain your family, you’d probably need to purchase or already own land, which is an even bigger investment.
Now let’s say you’re really passionate about the storage sector, you could also look into licensing and insurance requirements in your locality. By starting your own business, you may gain more local credibility than as a run-of-the-mill Neighbor host, which might allow you to charge more money.
You’d also be able to skip out on those processing fees Neighbor charges, though there would be other overhead costs likely to run you even more.