There are a number of apps that help you rent your stuff while you’re not using it, like Airbnb for homes and Turo for cars. Now there’s Neighbor, which lets you rent out your unused space for storage.
This Neighbor review explains how the app works, the types of spaces you can offer, and a few important things to keep in mind if you’re thinking about signing up.
Neighbor Storage App Summary
Neighbor connects people who have empty space with people who need storage. Almost any space is rentable on the platform, including garages, closets, backyard sheds and even driveways (for things like car and boat storage).
- It allows you to monetize what you already have. There’s no need to purchase anything new or spend money on upgrades to make a space “storage friendly.” You’re already paying for your driveway, shed or carport with your mortgage payment or rent, so why not make money off of your unused space?
- It generates passive income. There’s no monetary investment required to get started and it only takes a few minutes to list your space on the platform. Once your renter has moved their stuff if, there’s essentially no further action required on your part. This makes it one of our top passive income ideas.
- It offers significant flexibility. As the owner of the space, you set the terms of the storage contract. This includes minimum or maximum length, as well as the times and frequency that the renter has access to the space.
- There are liability concerns. The biggest drawback to using Neighbor is that it opens you up to the liability of having someone else’s stuff (and occasionally the stuff’s owner) in your personal space. Although Neighbor offers $1 million in liability insurance, there’s always the possibility of your space (or your renter’s stuff) getting damaged (the $1 million in coverage does not cover potential property damage).
- You’ll get below-average rates. While you control the pricing, don’t expect to charge as much as professional storage facilities. Lower costs are the main reason why customers choose Neighbor.
- Dealing with renters can be a hassle. If you aren’t renting out a space with private entry and locked access, you may have to deal with your renter wanting access to their unit at odd hours, or just the inconvenience of having someone walk through your house to get to the basement storage area.
Key Facts About Neighbor
Here are some important things to know before listing your space on the Neighbor app.
- You can pick your renter. While you must follow all anti-discrimination laws, you can select your renter from your pool of applicants.
- It’s not just for garages. Do you have a parking space? Attic? Shed? Closet? Basement? Storage container? You can rent out any of these spaces on Neighbor.
- You can’t get stiffed by your renter. Neighbor provides a rental guarantee to its hosts for up to two months in the event that your renter fails to pay.
- Neighbor prohibits the storage of dangerous or illegal goods. Worried about whether your renter will keep drugs, toxins, or other problematic items at your home? Don’t be. These items are expressly prohibited in the terms of service.
- You can choose “Smart Pricing” if you don’t know what to charge. This feature updates your price based on the supply and demand of storage units on Neighbor in your area.
How Neighbor Works
Listing your space on the Neighbor app doesn’t take much time or effort. All you’ll need to get started is your driver’s license, the dimensions of the area you’re listing for rent, and a few photos of the cleaned-out space.
When you create your listing, you’ll note all the details about the place that a potential renter would want to know, such as what kind of space it is (garage, basement, etc.), how big it is, whether there’s private access, whether the place comes with a lock, and so on. You’ll also give the address of your storage space, as well as the hours (and how often) the renter will have access to it.
You’ll need to upload a picture of your driver’s license to verify your identity. For safety purposes, renters must also verify their identities. Neighbor makes payments via Stripe, so you’ll also have to enter your Social Security number for taxes.
To complete your listing, you’ll enter the price you want to charge for your space (including any first-month discounts), as well as the terms you want in your contract. Upload a few photos and write a compelling description, and your listing is ready to go!
Once your listing is live, renters can search for it on the app and make an inquiry if they’re interested in renting your space. You and the renter message each other through the app. Once you find a renter that works for you, approve them through the app and make arrangements for them to move their stuff in.
How Much Money You Can Make on Neighbor?
Naturally, this depends on how big your space is, where you live, and what you’re able to store. Here are a few examples of the monthly rental amounts of different spaces in different markets so you’ll have an idea about what to expect:
|Salt Lake City||Oklahoma City||Boston|
|Garage (10 x 20)||$100 – $150||$83 – $200||$150 – $275|
|Driveway (uncovered)||$73 – $136||$50 – $100||$129 – $277|
|Indoor storage (8 x 10)||$30 – $60||$25 – $84||$60 – $100|
You’ll command more money per square foot if you’re able to rent out a large, dedicated space like a garage. Renters pay a premium for covered, climate-controlled spaces because they can store sensitive items there.
While the Neighbor app is still fairly new (it only launched five years ago), many users have reported a successful experience renting out their unused space for passive income.
Users report earning anywhere from $28 to $1,000 a month, depending on the type of space.
There is no fee to create a listing in Neighbor, but hosts pay a fee of 4.9%, plus a $0.30 processing fee. Neighbor also charges the renter a service fee, which they can see before they reserve a space. This renters’ fee amounts to about 10% to 15% of the rent charged by the host.
Common Questions About Neighbor
Because Neighbor is a new way to rent out real estate, you’re bound to have some questions. We’ve covered some of the most common ones below.
In 2020, the average cost of a storage unit in the United States was $1.16 per square foot, which is about $92 for an 8×10 unit. When you compare this number with the prices listed in the table above, it’s easy to see how much renters stand to save in most markets by renting space using Neighbor, as opposed to going to a traditional storage facility.
As the host, you can designate what type of access your renter has to the space in your listing. You can require them to give you notice each time they need to get to their stored items, or give them private, 24/7 access with a key code or lock. It’s up to you.
Neighbor prohibits certain items, such as firearms, ammunition, explosives, and perishable food, from being stored in any space available on the platform. But you can also disallow any type of item you don’t want to store by stating it in your listing.
Neighbor encourages both hosts and renters to get their own insurance to cover items in the event of damage. The company doesn’t get involved in disputes between renters and hosts over damaged items, so plan to protect yourself if you choose to host.
Neighbor prohibits the storage of many items that could cause harm (toxins, animals, drugs, etc.) to your property in its terms of service, but if you suspect that your renter is storing these items, you are allowed to investigate the contents of the stored items without a warrant. However, Neighbor is just the middleman in this arrangement, matching hosts and renters; they don’t assume any liability for damage to renters’ property, so plan to get your own insurance so you’re covered.
Contracts on Neighbor are month to month, so you must provide 30-days’ notice to your renter before they’re required to remove their items from your space. If you do not or cannot provide that 30-day notice, you may be charged a $60 eviction fee and required to issue a refund to the renter. Neighbor’s customer support team is available to help hosts who have unresponsive renters or who need to evict a renter for any other reason.
Neighbor App Review: Final Verdict
The Neighbor app has very positive reviews and is a legitimate way to make passive income. Unless you have acreage or a ton of extra space, the income you make with Neighbor will likely be limited to that of a side hustle rather than a full-time automated business, but the initial input and ongoing work required are both minimal.
This might not work for folks who aren’t allowed to sublet, or who could run into problems with an HOA for having extra vehicles on their property. You’ll also want to make sure you have adequate insurance coverage in case anything goes wrong.
For many people, however, renting out extra space on Neighbor is monetizing part of their homes or properties that would just sit empty otherwise.