If you have a small bathroom, there are two ideal spaces to maximize your space for a towel rack: above your toilet or on the back of the bathroom door. Placing a towel rack above your toilet is ideal if you want your towels close enough to grab when you're out of the shower. Here, you can use a rack that allows you to fold and store new towels and hang wet towels. Similarly, you can use an over-the-door towel rack to hang wet towels and allow them to dry. If you have a shower door, you could also hang the towel rack there.