Purchase of Car Park spot

From: Manny B


Howdy there,

I have come across the sale of car parking spots in Melbourne for $45,000 which offer a 6.5% NET return with an annual rental increase of 3% (or CPI, which ever is less) locked in a 10 year lease with an option for a further 10 year lease...

Has anyone ventured in the car parking spots? if so, what do you need to look out for? is it a wise investment? what is the capital growth like (as the net return sounds quite good)?

Cheers,

Manny.
 
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Reply: 1
From: Dave :)


Hi Manny,

I've seen this as well, and it caught my eye. Was yours listed by COVERLIDS Real Estate?

Good return, zero maintenance...just unsure about the growth. I'm pretty sure it's going to be minimal because last time I saw CBD carparking for sale, it was around 30K. I think the guaranteed return is built into the price.

It is interesting though.

Cheers,

Dave
:)
 
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Reply: 1.1
From: Manny B


Hi Dave,

it was through Coverlids R.E., I must admit it did catch my eye & 6.5% net (as all expenses being covered) did appeal to me...

But as you said, I am worried about the capital growth you may get in the next 5-10 years...

Cheers,

Manny.
 
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Reply: 1.1.1
From: Robert Forward


Hi Manny.

Car Park spaces are their own industry. Yes they do get inflation and prices rises and stagnations like the property market.

But a lousy 6.5% return. You might as well stick your money into a managed fund...

What can be done to enhance the market price of the parking space (paint the cement?). At least with Real Estate you can add value to your property so it can then determine the market value. The Car Parking space is set by the sales of others around it...

I'm not saying don't buy it or anything. As Car Parking spaces in the Sydney CBD have had massive increases of value but it's a different ball game. The parking spaces value is set by how close to the exit it is, what level its on. how easy it is to get into and out of, is it on the city CBD fringe or in the center. Which is better to have a parking space right in the CBD center of on the fringe so it's easier to get out onto the freeways and takes less time to get home.

These are the things that you'd need to consider if you are serious about car parking spaces.

Anyway, hope that helps

Cheers
Robert
 
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Reply: 1.1.1.1
From: Douglas K


interesting!

one thing to bare in mind. in sydney CBD the govt placed a large tax on car spaces. govt's the way they are might do the same in melbourne cbd.

cheers and happy parking

douglas


as my grandpa used to say "speculate and accummulate, but only buy where you wanna die"
 
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Reply: 1.1.1.2
From: Kristine .


Sorry, Robert

Valuations of car park spaces are not calculated in the same way as residential property.

Car park spaces (I am selling some at the moment, but not the ones advertised by Coverlids) are bought at a standard amount, and leased to an operator who pays all the individual owners, whether their space has been used or not.

In other words, spaces are not numbered or metered individually. Value is more likely to be linked to other factors eg is the park open to the public, can the operator maintain a steady income, is the park sublet to a tenant, how long is the tenants lease etc

Spaces make a good accessory buy when bought in conjunction with eg an apartment. Around Camberwell, some developers have created more spaces than required in 'normal' unit developments, so that they can sell the extra spaces to other owners in the same street or neighbourhood, who perhaps have no off street parking of their own.

As in all situations, there can be pros and cons, but generally speaking, car spaces, especially if there is a good, indexed lease providing a respectable return, can be a 'nice little earner'. Don't overlook the land value component for the basis of capital growth. Land value is present, even in a car park.

Cheers,

Kristine
 
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Reply: 1.1.1.2.1
From: Robert Forward


Have you been looking at those units in Queanbyane again Michael??

I saw a unit sell for $17k that was rented at $70 when I was checking the market out down there late last year.

But anyway at least it is positively geared.

Cheers
Robert
 
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Reply: 1.1.1.2.1.1
From: Robert Forward


I'm not interested in those units in QBN, as I go for houses instead (but that is me). So no I didn't buy them. Main reasons were to many in the area, they have been at those prices for 4 years. Yes it took a cap growth hit but QBN took a large cap growth hit in November-December last year that continued onto earlier this year.

This actual deal was settling when the agent told me about whilst I was in her office. So I never had an opportunity on that one. Though there are always 100's of other similar units close to the CBD of QBN that are always up for sale.

Anyway, that is my little story on that episode.

Cheers
Robert
 
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Sim

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You want cash positive.......

Reply: 1.1.1.2.2
From: Sim' Hampel


I've been hanging around downtown Chicago for the last couple of days, and I must say that I'm impressed with the amount of car parking that seems to be available.

There are of course, the purpose built car parks, but additionally there are quite a few old buildings that have been converted. Some still have the glass in the windows and you can tell that they were office buildings at one stage.

Given the amount of high rise residential accomodation in the area and the skyscraper office blocks... there would be a high demand on parking space.

 
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Reply: 1.1.1.2.1.1.1
From: Robert Forward


Hi Michael

I'm fine with what you've posted, others may be a bit more sensitive to what gets written though...

Poor you having the Mumps, ouch. I've heard certain body parts on males can swell up and be really painful.... OUCH.... I hope that isn't happening to you.

Get better soon Michael

Cheers
Robert
 
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Reply: 1.1.1.2.2.1
From: The Wife


carparks?.....

*cough* Singapore...*cough*must go there and degrease...*cough* least once a year....*cough* look after asset....

:eek:)
~Life is a daring adventure, or nothing at all~
 
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Reply: 1.1.1.2.2.2
From: Adam Randall


Hello Sim
I spent 1 night in Chicago at the Holiday Inn on Lake michigan during summer (it was still a bit cold, and windy). I regret not staying longer, it has the museum of natural history (where the 2 lions that ate 115 people are on display), how long are you there for and is it worth staying for a week or two.
Regards Adam
 
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Sim

Administrator
Chicago

Reply: 1.1.1.2.2.2.1
From: Sim' Hampel


Hi Adam,

The weather is fantastic here at the moment... I'm only here until the end of the week, and can't stay longer (I'd have to pay for it if I did !) - and I have to get back to Sydney straight after my work here is done anyway.

I'll definately be coming back sometime in the future... very interesting place, Chicago. My wife insists that I take her to visit all these places I go to... so when I've got lots of money from my investments I'll be travelling the world pointing out all the hotels I stayed in and all the things I didn't get to see while I was working there !

 
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Reply: 1.2
From: Jakk Bass - The SLUM LORD


Hi Manny,

I dream of the day that I own a car worth $45,000 let alone a car park spot worth that much.

regards
Jakk

"Chance is the pseudonym God uses when He does not want to sign His name."
-Anatole France.
 
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