Carpark Investment Melbourne CBD

[Parters]

Hi Fellow Investors

Does anyone have a carpark investment in Melb CBD?

We purchased one six years ago with promises of rental guarantees of 7.5% with annual increases. Since then we have had 18 months of no rent (the initial managers went bankrupt) and a couple of years with very low returns.

Needless to say we are really disappointed and have since steered well clear of any further commercial purchases (LOVE our residential properties).

We generate a grand total of $109 net rent per month on the carpark. This drives me mad as carparking in the city costs a minimum of $15 per day but can be much more.

We can't sell the thing for anything near what we paid for it because of the lousy return. And every month we have to make up the shortfall.

I'm interested to hear if anyone else has or had a similar investment. What sort of return did you get, sales price...etc. Basically I'd like to know if I am stuck with this lemon? Should we sell and take the loss or am I getting stooged and getting a lousy return - maybe I should be getting more? How do you change property managers when we are talking about big name car park operators?

Thanks, Parters

 

[The Y-man]

Sorry to hear of your experience. I suspect very similar to some serviced student apartments too.....


What is the leasing arrangement? Is it a leaseback to the car park operator?

Cheers,

The Y-man

 

[Belu]

and where is it?

 

[Dazz]

I've always found individual carpark bays to be akin to owning one apartment in some high rise conglomerate. So-so yield and so-so growth - if any.

What really gets the blood flowing is owning the whole thing, and hence controlling the Land underneath the structure. That's when superior capital returns MAY eventuate, and the yield can be controlled.

If you've simply purchased one small bay in a carparking station of say 500 or 600 at the top of some boom, then yeah, it's gonna struggle along producing very mediocre returns.


What exactly is the Leasing arrangement and how much stroke do you have in re-negotiating ?? If a large operator controls say 600 of them with their brand name, and they have it signed up for the next 5 or 10 years, then I'd flog it off, go and do a whole lot better homework than what you did previously, and purchase something that you have a bit more control in.

Only my thoughts, totally disregard if it suits, based on very limited info that you have supplied.

 

[Parters]

Thanks guys

It is in Franklin St, just one bay, no negotiation room with the lease but we can just get out and lease it out independently (not really something we want to do - too fiddly).

Cost $45k and would be lucky to sell for $30k.

You are right - minimal homework done and we have learnt a lot since. The only silver lining is that we made some big mistakes with this first foray into property investment which made us doubly careful with all purchases since. Totally agree with the land content creating the growth. I guess we chalk it up to an expensive learning experience.

I think we need to sell.

Regards, Parters

 

[The Y-man]

Cost $45k and would be lucky to sell for $30k.

You are right - minimal homework done and we have learnt a lot since. The only silver lining is that we made some big mistakes with this first foray into property investment which made us doubly careful with all purchases since. Totally agree with the land content creating the growth. I guess we chalk it up to an expensive learning experience.

I think we need to sell.

Regards, Parters

Yeah, well some people pay more than $15k for a seminar, and still not get much out of it Experience is priceless (as long as you live to fight another day)

Cheers,

The Y-man

 

[geoffw]

Is there a way you could rent out that space?

What about flyers in local businesses? Messages on cars? (be careful of regulations- some places don't permit that). Signs in local shops? An a-frame sign outside?

There must be someone who would take that space at if they knew what it would cost them- it could be a lot cheaper than what they are paying now.

 

[SillySausage]

When you say leasing it out on your own would be too fiddly.....it sounds like it would be dead easy to manage.

I would try some of my own advertising and marketing.....a smart little ad in the paper might get some replies.

 

[handyandy]

Hi Parters


Have you tried this site

http://www.findacarpark.com.au/view-carpark.cfm?prid=980

They are advertising a similar parking spot for $270 pm so at least that is an increase on your current return. More importantly it would be worthwhile getting it rented out this way so that you can sell it with a reasonable return.

I am sure that you could find a RE to collect the rent so you are not involved on a daily basis.

Cheers

 

[wombat]

Parters,

I think you should advertise like others have said here and lease it independantly. - I think you may surprise yourself.

I mean, it's a car spot, not much can go wrong with a car spot.

Car parking is more difficult to come by in the CBD - not as bad as Sydney, but certainly tending that way.

People who would want to rent their own car space in the CBD and the flexibility it offers them would generally be on a pretty good wicket salary wise.

wombat

 

[The Y-man]

It is in Franklin St, just one bay, no negotiation room with the lease but we can just get out and lease it out independently (not really something we want to do - too fiddly).

Quick question - can it be used any time? (i.e. 24 hour access)

Cheers,

The Y-man

 

[BayView]

Maybe there are some public carparks nearby where people pay a daily rate that is 'bend-over' prices, and leave a simple flyer under a few windshields advertising your car space at a discount; say; $10 per day or even $8.

It wouldn't take too much to beat $109 per month.
get 'em to pay in advance. Too easy.

 

[kingchevy]

Rent it day and night double you're return would take a bit of organising but if you offered it to 2 people one who works days and one who works nights at a very reduced rate then you could affectivily increase you're return by upwards of 50-80 percent?? just an idea.

 

[ILoveProperty]

Included with the Age on the weekend was the spring edition of their property guide. I assume it will be available here in the near future?
http://www.domain.com.au/Public/Guides.aspx

But there were a few paragraphs in there on parking spaces doing very well.

Parters - not sure how real this is but things might be improving?

The article mentioned the sale of a space for $75k (from memory which could be wrong)