Are parking spaces and garage boxes a good investment?

Question

Suppose, the following scenario:

You have an investment budget available to buy a parking space or garage box. (In Belgium that would be around €25000 ($30K).)
Currently the saving accounts make less in interest than you lose on them due to inflation.
You are not interested in borrowing money to make a bigger investment. The €25K is your working budget.

Would a parking space/garage box be a good investment? Considering the following benefits:

You would buy one where there is good demand for parking space, so you would have rent income.
The value of the parking space itself will most likely rise, so when selling after a couple of years, there could be a profit.
There is less/no maintenance, while when buying a house, there is a high possible cost of repairs. So it's "making money while you sleep".
It is very unlikely to crash as much as stocks on the stock market could crash.

What would be other alternatives, and with what different advantages/disadvantages?

user4127 · Accepted Answer

If the company that owns the lot is selling them it is doing so because it feels it will make more money doing so.  You need to read carefully what it is you are getting and what the guarantees are from the owner of the property and the parking structure.  I have heard from friends in Chicago that said there are people who will sell spaces they do not own as a scam.  There are also companies that declare bankruptcy and go out of business after signing long term leases for their spots.  They sell the lot to another company(which they have an interest in) and all the leases that they sold are now void so they can resell the spots.

Because of this if I were going to invest in a parking space, I would make sure:

The company making the offer is reputable and solvent
Check for plans for major construction/demolition nearby that would impact your short and long term prospects for rent.
Full time Rental would Recoup my investment in less than 5 years.  Preferably 3 years.  The risk on this is too high for me with out that kind of return.

Your Mother · Answer

No no no no!!!! Do not spend 25k on a damn slab of concrete when you don't even own the land! You are not "truly" the owner unless you legally own the land. I don't care what country your talking about. If you like I'll come over to your place, mix and pour some concrete on the floor, and you can pay me 5 euro. Deal?

Buy the smallest parcel of land you can find. Own the land. Pour some concrete on it and viola!!!

Marco Demaio · Answer

In Italy (even with taxes that are more than 50% on income) owning garages is generally a good business, as you said: "making money while you sleep", because of no maintainance.

Moreover garages made by real concrete (and not wood like in US) are still new after 50 years, you just repaint them once every 20 years and you change the metal door gate once every 30 years.

After 20 years you can be sure the price of the garage will be higher than what you paied it (at least for the effect of the inflation, after 20 years concrete and labour work will cost more than today).

The only important thing before buying it is to make sure it is in an area where people are eager to rent it. This is very common in Italian cities' downtown because they were built in dark ages when cars did not exists, hence there are really few available parkings.

Jack F · Answer

15 years ago I bought a beach condo in Miami for $400,000 and two extra parking spaces for $3000 each. Today the condo is worth 600,000 but the rent barely covers mortgage repairs and property taxes.

Most of The old people in the building have since died and are now replaced with families with at least two cars and spots are in short supply.

I turned down offers of 25,000 for each parking space.

I have the spaces rented out for $200 per month no maintenance for an 80% annual return on my purchase price and the value went has gone up over $700%. And no realtors commissions if i decide to sell the spaces.

Are parking spaces and garage boxes a good investment?

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