Outdoor Sheds Animate and Add Value to Residential Property
If you own residential rental property or are considering adding it to your financial portfolio, then think about how to sell more services to your captive audience, ie, tenants.
Things like tech package, cleaning services, meal plan and… storage.
Why should one of your tenants have to load then get in her car, drive 15 minutes to a self storage place, and pay anywhere from $100 to $155 monthly for a 10′ x 10′ storage locker when she could have that in your backyard for say $85 or $95 a month?
It’s good for her, but how about you?
Well in most jurisdictions, you can place a 9 square meter (about 100 square foot) shed in your backyard without a building permit.
So step 1 is complete before you even start.
It’ll cost you about $2,500 for a decent shed–I’d advise using a woodframe one with asphalt shingles or metal roof.
My two boys and I built one of those on a rural property we own and, 30 years later, it’s still serving its original purpose.
The only thing we’ve had to do is re-shingle the roof (once), but only after a tree fell on it during a windstorm. The funny thing is I had a tree cutter I know remove all the trees from around the cabin, which he did faithfully, all except one that is.
When I next went up to our property, I called him, “Chris, you’ve left one tree next to the cabin!”
“Yeah, I know,” he responded. “I’ll get out there next weekend to get the last one (of more than 30, ed) down. I just ran out of time. Sorry.”
Here’s my treecutter in action:
But before he could return, a windstorm blew in and toppled that single tree, weakened no doubt by not being surrounded by its brothers and sisters. It could have fallen anywhere in a 360 degree arc, but of course, it fell directly on the cabin.
So here’s poor old cabin-in-the-woods after the tree fell on it:
We fixed it up, and it continues to give great service to our family to this day.
Compare that with the metal shed we bought (shown above in the lead photoset) from a humongous big box store owned by an American company with a name that rhymes with “rowes”.
It didn’t make it through a single Canadian winter–it’s roof caved in despite the fact that we shoveled it off after every snowstorm. When we complained to Rowes, they told us, “Oh, yeah, those SKUs. You shoulda bought the roof strengthener kit.”
Jeez thanks guys.
Anywho, the economics (of woodframe construction) look pretty good from the POV of landlords.
Here’s the breakdown:
Most residential property in a market like Ottawa trades at cap rates of 4.5% to 6% pa so any time you can add an element like a backyard shed that has a capitalization rate of over 40%, well that’s darned good.
A friend of mine adds them to all the properties he manages now. Here’s his latest testament–
I told Fred (not his real name, ed) about the shed idea, and he asked for one at one of his rentals.
decided to go a bit bigger–about 140 square feet so we needed a building permit. The permit cost $80, and
the build was $4,900, so about $5,000 all-in.
However, we’re going to split it down the middle, add a second door, with the goal of renting out each side for $75 per month. Fully
rented, that’s $1,800/yr and a 36% ROI.
Not too shabby, right?
I found a supplier of Amish sheds in Ottawa that you can check out for yourself, https://jandmharvey.com/
Their pricing looks decent:
8 x 8 – $1,750.00
10 x 10 -$2,430.00
8 x 10 – $1,920.00
10 x 12 – $2,650.00
8 x 12 – $2,090.00
10 x 14 – $2,880.00
8 x 14 – $2,260.00
10 x 16 – $3,110.00
8 x 16 – $2,430.00
10 x 18 – $3,620.00
8 x 18 – $2,600.00
10 x 20 – $3,850.00
8 x 20 – $2,880.00
10 x 22 – $4,410.00
8 x 22 – $3,100.00
10 x 24 – $4,675.00
8 x 24 – $3,550.00
You’ll get a nice 8 x 12 for $2,090 (he’s
offering a 10% discount too I believe).
Here’s his contact info:
6044 Perth street Richmond ON K0A 2Z0
mike @ jandmharvey.com
You should have at least 12 inches of compacted gravel under your shed. I actually use 18 inches, and don’t forget to remove the overburden (topsoil), which has the bearing capacity of a slug, so remember to expose the subsoil, which’ll almost certainly have better bearing capability.
Here are step by step instructions on how to build a base from Rona’s website, https://www.rona.ca/en/projects/Create-a-paved-area-with-concrete-pavers-or-slabs
So this is my prescription to becoming an urban mini storage king (or queen), in secret…
ps here’re a few pictures I took recently when I happened to pass Mike Harvey’s place in Richmond ON–
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