What to charge for the use of a workshop?

muddlemand · 14 January 2020 at 4:14PM

A friend is about to set up selling models he makes - a business he has done in the past and is getting back to. He has asked if he can use a workshop I have - I think of it as the shed, but it has a workbench and is really a workshop or (he says) studio. It is bigger than a shed, probably big enough to garage a car, or nearly (but without that kind of door).

I've said yes in theory, on condition that he does the setting up - it has lighting but needs heating, and a good clean-up / clear-out. All the one-off costs are his problem. but how much would be reasonable to charge, ongoing?

I'd prefer to charge a set amount weekly or monthly, rather than keep track of the hours he's there. (He's only just made the suggestion today and we haven't got down to details like which days and so on.) I don't feel it's fair to charge as much as he'd pay for a commercial place. Or would it be fair to? I'm so used to thinking of it as a cluttered, cobwebby space where I never go, it's hard to decide how to approach this.

Exodi · 14 January 2020 at 4:28PM

If you've always considered it a 'cluttered, cobwebby space', I think it would be, putting it politely - cheeky, to suggest a commercial rate to someone - let alone a friend.

The price will be somewhere in the middle of 'how much would you need to for it to be worth your time' and 'how much would he be willing to pay for it'.

[Deleted User] · 14 January 2020 at 4:29PM

Its a large shed he will make into a studio at his own cost. I doubt it will be very warm so if he plans to work in it this time of year, it will need either heating or insulating in some way. Not cheap. Personally I'd charge a minimal amount for six months, then increase it presuming he is making a go of his business. You can have friendly discussions with him about this.

Surely you can't really be considering charging him a commercial rate? You do realise there is a huge difference between a cobwebby shed and a unit on an estate? One way to lose a friend I suppose lol.

However, if he is running a business from your shed I wonder if this will have tax implications. I know nothing about this.

Ozzuk · 14 January 2020 at 4:39PM

A few other things to consider (you don't need to answer)...will your mortgage (if you have one) allow a commercial enterprise on the property, will the council allow a commercial enterprise, will your insurance have issues (liability insurance?), will you need to consider the safety risks - fire safety, evacuation etc, will you need to certify electrics, what about your tax position, will your neighbours complain (and have grounds to), do you want someone in your garden at all hours (especially in the summer), what about all the potential deliveries. Lots to think about!

comeandgo · 14 January 2020 at 4:44PM

Some friend you are. He is about to change an old shed into a workshop probably worth a lot more, at his own expense and you are looking at charging him rent?
How about you let him use it for a set amount of months at no charge to get his business off the ground and then just charge for the electric. If you charge rent you then have to look at HMRC. In fact if you are charging should you not have electricity safe certification or whatever a landlord has.
Also your house insurance, does it cover business in shed? Are there any restrictive covenants on running a business from your property?

AdrianC · 14 January 2020 at 4:53PM

You're two grown adults.

Sit down, and come to an agreement between you.

Bossypants · 14 January 2020 at 4:57PM

I assume the electricity supply and any other utilities would be in your name? If so I would ask him to cover his use, and maybe give a token fiver to charity in your name or something. If this becomes a serious, longterm arrangement, maybe you can revisit in a couple of years, but right now it sounds like you have a space which isn't worth much in its current form, and your friend is offering to revamp it at zero cost to you, in exchange for getting to use it for a while afterwards.

silvercar · 14 January 2020 at 4:57PM

He's a mate, he's tidying it up, he's starting out in a new venture.

I'd be inclined to let him have 3 months free, other than electric costs. Of after 3 months he decides it was all for nothing you have a mate and a tidy studio/ shed. If it works out then you can sit down and discuss a reasonable rate. It also gives you an opportunity to decide if it is something you want to continue with.

Is he going to have access to your home to get to the shed? Does this shed have a toilet?

muddlemand · 14 January 2020 at 5:18PM

Hi @comeandgo, you make me see how much I left out of the question!

He started the conversation by offering to rent. We met when he bought something I sold on Facebook, I have hired tools to him and similar, so basically a "business relationship" but we have become friends too. He made this suggestion as an offer to pay rent for a space I'm not otherwise using.

My finances are dire and getting worse; his are not great but on the up. I'm caught in a trap of not being in good enough health to battle the DWP, so I'm eating my savings until they run out which will be in a year or so. (I will keep trying but so far each attempt to claim benefits has affected my health dangerously.) I'm not in a position to say no to money that anyone's happy to pay to me.

Whereas he's in good health and was successfully self-employed for years, had some big life changes that ended all that, but is back on his feet and on the point of getting back on his feet financially too.

I've looked at many possibilities for income without me putting any (or many) hours in, eg renting out parking space, selling things, but no one would pay to park here (a village without even a bus route) and I'm not up to much selling (£30 every other month if nothing gets in the way). I'm open to any out-of-the-box ideas.

I have the feeling he's much more canny than I am, businesswise and moneywise, so I'm cautious each time he asks/suggests something, but so far everything has worked out fair. Frankly I suspect he finds things to pay me for, to help out without appearing to offer charity.

For the shed, I just want to have an amount in mind before he asks me to name one.

All he'll do is dust maybe, clear some old furniture out of the way (which is beyond me), tidy up the workbench, and I imagine buy a heater or something so as not to freeze while in there. Hardly redecorating or converting - it's already a workshop. (I just call it "shed" from habit as it was never me that used it.) I do feel it's fair to say any one-off costs should be the user's, don't you?

I'll be selling the house as soon as pos - not for a year or so, as it takes a lot more "doing" than if i were in good health. They always say don't spend on doing-up as you won't break even on increased value, so I definitely wasn't going to make any improvements, and even if I had been, there are far more important repairs ahead of that workshop.

I hadn't thought about the home insurance and will consider that (thank you). As i said the idea only came up this afternoon so I certainly haven't thought through the details yet.

I may decide to tell him just cover whatever extra it costs me, eg however much it adds to the electric bill, any extra on the insurance. But since it was his suggestion, and he's clearly happy to pay me something for it, I'm not going to look the gift horse in the mouth.

caprikid1 · 14 January 2020 at 5:19PM

Ask him what he thinks is fair, he may suggest a price that's more than you want.

getmore4less · 14 January 2020 at 5:19PM

Ask if it is temp to get going or more permanent because it is big enough.

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What to charge for the use of a workshop?

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