Parking Spaces That Could Make You Rich

Parking Spaces That Could Make You Rich

- in Real Estate
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Buying individual parking spaces is a little known but extremely appealing real estate play for small investors like Ms. Jones. The obvious selling points are comparatively low prices, steady income, next to no maintenance, and wear and tear limited to the odd oil stain on the cement. Moreover, a growing number of parking apps is making it easier to rent out these spaces on a yearly, monthly, daily and even hourly basis.

“It’s a great investment idea for individuals or small groups, for sure,” said Keith Bawolek, chief executive of Vermillion Realty Advisors in Chicago, Ill., which specializes in acquiring multimillion-dollar garages and parking facilities for institutional investors. “There are opportunities in every market. You just have to be diligent and understand the right entry point for you as an investor.”

Marc Wisotsky and his partner, Jackie Lew, bought two spaces in 2005 in a parking garage near their home in Park Slope, Brooklyn, for around $45,000 each. They used one and rented out the other for $600 a month, pocketing $310 after taxes and the garage fee.

It was a tidy, reliable income, Mr. Wisotsky said, but the real payoff came when he and Ms. Lew sold their extra space last year for $285,000. “We could have gotten more — the prices just keep going up and up,” he said. “There are never as many parking spaces as residential units being built.”

Charles Cridland, a founder of YourParkingSpace, which he describes as the Airbnb of parking in the United Kingdom, at a parking space that his parents own and rent out in East Putney, London.

Credit
David Azia for The New York Times

According to Parkopedia’s 2017 Global Parking Index, the most expensive cities in the United States to park are New York, Boston, San Francisco, Washington, D.C., Seattle and Chicago. Abroad, it’s London, Zurich, Amsterdam, Sydney, Hong Kong and Tokyo. Top average rates are about $600 a month in New York and London, $47 a day in Sydney and $33 for two hours in New York.

Moreover, the value of parking spaces tends to appreciate even when the overall real estate market softens. Experts say this is because of an ever-declining supply brought on, in part, by developers who have successfully lobbied municipalities to do away with regulations to build sufficient (if any) parking and urban planners who advocate limited parking to encourage the use of mass transit.

Of course, the barrier to entry in some of these markets is substantial. In Hong Kong, prices for spaces can go as high as $644,000, which can make any derived rental income seem piddling. But if you’re strategic and pay attention to population density and traffic flows, you can find affordable, income-producing parking investments on the fringes of major markets, as well as in smaller cities and suburban areas, said Charles Cridland, a founder of YourParkingSpace, which he described as the Airbnb for parking in the United Kingdom.

The vast majority of listers on his platform are individuals, including his parents, who invested part of their pension in three spaces in garages near train stations in the Putney and Brixton neighborhoods in south and southwest London. They paid a total of $73,000 and are getting around a 7 percent annual return, mediated by their son’s app, which books the spaces and collects the rent.

Most individuals listing on YourParkingSpace rent out their spaces by the month, Mr. Cridland said, because it’s easier, particularly if there is a fob or card-key entry that needs to be handed over. But he said, “We also have mini-entrepreneurs who go around to friends and neighbors and ask, ‘Can I rent out your space?’” and then list maybe 20 spaces around London, some of which they can turn a couple of times a day to earn a “significant side income.”

SpotHero, an app that helps car owners locate spaces in the United States and Canada, lists mostly excess vacancies in hotel garages. But Larry Kiss, a founder of the company, said he has noticed more independent listers offering spaces on the site, whether it’s an extra space in their home garage or driveway or a space they have purchased. Another app listing an increasing number of one-off parking spaces, as well as storage space, is Spacer.

Parking investors do face an uncertain future, though. If more people start driving electric cars, spaces without charging stations will be less desirable. Ride hailing apps and self-driving car services could also dampen demand.

But Mr. Wisotky in Brooklyn, for one, isn’t worried about a downturn in the market, nor is he giving up his remaining parking space anytime soon.

“You don’t know what freedom is until you get in your car, drive over to the supermarket, pick up a container of milk, drive home and it’s over,” he said. No waiting for a car service to pick you up or collecting data on your movements (hello, Uber).

And most of all, he said, “No circling the block for hours in the snow looking for a place to park.”

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