Has anyone had any experience with purchasing car parking space as an investment. Are there any websites that may be of value?? Any comments about the value and risks involved with this line of investment. I am in Brisbane and was looking at spaces in the CBD with reputable companies i.e Kings or Secure. Thanks
yep great little cash cows … suggest you buy them cash in your super fund … we own 4
D
you can do that ?
I agree with Wealth.
I use my SMSF to undertake a lot of good cash flow ventures, whether it be wrapping, buying instalment warrants or land subdivisions.
Richard Taylor | Australia's leading private lender
<font size=”2″>Hello D</font>
<font size=”2″>Can you give us an idea on the return available for a car parking spot after management fees please. Also, an idea of the price of a spot? Also what are the expenses involved.I assume there is no CG to be had but does the price keep up with inflation?Thank you for any info.
Elka</font>
I am not sure if investments in car park is the best thing to do especially with cash. I think the return is around 6-7% nett. You can get that kind of a return with a term deposit. Also, I believe the capital growth on car parks is lower.If you decide to borrow to buy, the LVR is usually low (65-70%, I believe). Because they are managed by companies like Kings Parking, Wilson Parking, etc, there is nothing you can do to add value. You have to wait for the market to move to get any appreciation.
I am looking at buying one locally for my own use.They seem to be on the market for a long time, and if in a private carpark they seem to be vacant without a tenant for long periods.
Tools
Hi D
As someone who owns 4 car parks, I thought you may be able to provide some tips on assessing the following proposal.
I have someone who is proposing to buy a commercial car park in North Sydney. It has 62 car lots and the current tenant is into his third year of a 10-year lease. One of the terms of the lease is that rent will increase by 4% annually. The expected capital appreciation is 7% per year and the IIR is about 16%.
What is the basis of 7% capital growth for a car park? Would you consider this good growth given that it's a car park?
Eve
My understanding of Car Parks as an investment are that there is obvioulsy a very low entry level, you get Title, they are fully managed and leased, for up to 10 years, and returns are high, and indexed to inflation, and market rent also. As it seems likley inflation will be with us sometime soon, they are probably quite good.
I didnt think any financing was available for these? Capital growth would be in line with the rental increase only . In times of high inflation, GREAT! Otherwise may not be as high as other properties.
Just becareful of congestion TAX if invested in car parks around sydney area/north sydney
It may make your investment become worthless<Moderator: delete advertising>
god_of_money wrote:Just becareful of congestion TAX if invested in car parks around sydney area/north sydney
It may make your investment become worthlessMelbourne has this tax also !
Car parks were a rubbish investment for us.
We bought 6 car park spaces in St Kilda (at the George) in 2005.
Cost approx $21,000 each and we had them for almost 4-5 years.
It was the biggest waste of money for the following reasons:
1) The average income in that parking centre was $108-$120 per month per bay before fees and charges
2) Management fees were 7%
3) Body corp fees were also payable, which were something like $40-$60 per QUARTER per bay
4) Council fees were $70 per bay per year.
5) When a tenancy was up, it took absolute ages to get another tenant, even though St Kilda is a vibrant area.
6) Conveyancing per bay was approx $1000 for buying and another $1000 for selling
7) This car park had both private and business spaces. The operator did not want to add our bays on to their books as they had enough already, so we were forced to find private tenants.
When we sold them, we struggled for 2 years to find buyers and overall, lost approx $40,000 on the deal as we were forced to sell well below what we had paid, just to get rid of them.The only good thing was that they were not in the city, so there was no congestion tax.
I will never again buy such a thing – it was a total money pit.
Thank you for that info Bevk!
I was seriously considering buying in to that very building!
From their advertising, it looked like a good investment with little risk…………….BUT, all the fees and problems you mention,it has put me right off!!
You cannot leverage with car parks and they do not tend to have high growth if any
There are much better investments around
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
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Well there are still much investments around than car parks
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
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Don't want to disagree with Nigel but you can gear into a Car park space.
There are 2 lenders i am aware of that will fund them.
Terms and rates are very similar to Taxi plates.
Still doesn't make it a good investment though.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Decent cash flow on car parks, I know one person who owns a couple in the CBD.
Personally I've only ever seen them advertising them in biz mags picked up in airports. Not where I generally pick up investments.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
If you pay cash for a car space will it be cashflow positive assuming a vacancy rate of below 5% and market rent achieved?
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This reply was modified 7 years, 5 months ago by Nathan Houareau.
If you pay cash for a car space will it be cashflow positive assuming a vacancy rate of below 5% and market rent achieved?
If it wasn’t – why would you buy it? ;) No point owning an asset for cash which loses you money, that is a literal money pit.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
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This reply was modified 7 years, 5 months ago by
When we sold them, we struggled for 2 years to find buyers and overall, lost approx $40,000 on the deal as we were forced to sell well below what we had paid, just to get rid of them.
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