While renting out your spare bedroom through websites such as Airbnb has dominated headlines in recent years, another option that can provide a steady income stream is renting out your garage or parking space.

In areas near train stations or commercial hubs where street parking is scarce and parking stations are costly, there’s strong demand for secure and reliable parking. Some residents in your complex may also appreciate the opportunity to lease additional storage space.

What are the rules?

Unless your strata scheme has a specific by-law preventing it, renting out your parking space or garage to a third party is generally permitted. This space is considered part of your lot allocation. If you’re purchasing with this intention, always check the by-laws first.

Setting up a lease

It’s wise to have the renter sign a Parking Space Lease. This creates a legally binding document that sets out the terms of the agreement. You may want to:

• Restrict usage to certain times (e.g., weekdays only)
• Set a fixed time period with the option to renew at a higher rate
• Clarify conditions of use for added protection

Liability considerations

While the renter is on the property, you’re liable for any damage they may cause – similar to your responsibility for any guest you invite. For peace of mind, you may wish to take out landlord insurance.

Storage vs. living space

You may use your garage for storage, including adding free-standing shelving without permission. However, structural changes require prior approval. Importantly, garages cannot be legally used as bedrooms. They aren’t classified as habitable spaces and are excluded from Owners Corporation insurance policies.

What if someone is living in a garage?

If you suspect a garage in your scheme is being used as accommodation, notify your Strata Manager. They can contact the owner for investigation, and if necessary, escalate the matter to the NSW Civil and Administrative Tribunal (NCAT).