Jul 232013
 

In the last decade or so the price of a Calgary parking spot has increased by 233%, according to Colliers international. Toronto prices have gone up 130%. The median price for a monthly spot in downtown Calgary today is $453, and Toronto is $336. But relative to other urban areas around the world it’s not so bad. Parking in London’s city center for example costs $933 (U.S) a month. Hong Kong is $745, Tokyo ($654) and Zurich ($605)

“The reason prices keep going up really comes down to limited supply,” said Wayne Duong, director of research with Colliers International in Canada. Over the last 10 years dozens of downtown parking lots from cities across the country have been” torn up”, and in their place, now stand condominium buildings ๐Ÿ™‚ “A shortage of spots, a lack of new supply and insatiable demand have all contributed to steady price gains in an often forgotten corner of commercial real estate.”

While the trend looks bad for drivers who work in the city core, this is becoming very lucrative for parking lot owners ๐Ÿ™‚ย Unfortunately when I found out about the following listing the property was already sold so I missed a good opportunity to buy a nice lot in a great location.

13_07_parkinglot

Not that it matters because I don’t have the kind of money to buy it anyway lol. It’s more common for parking lots to sell in bulk such as in the form of a parkade, however sometimes they are also sold individually. For example last month a pair of parking lots in tandem sold for $560,000 in Boston, Massachusetts. It was the result of a bidding war, literally, because the parking was sold via an auction. In 1993, the previous owner bought the two spaces for $50,000. You can double check the math if you fancy, but I reckon that’s a 12.8% average return on investment per year. Not bad at all ๐Ÿ˜€ Parking lots seem like a good way to diversify one’s real estate portfolio. Not only do prices rise over time, but they also provide income potential. And there is very minimal upkeep to maintain a parking lot. Insurance and security cameras aren’t even necessary most of the time.

How to invest in parking spaces? I can only think of a couple ways at the moment. But maybe you can think of others.

  • Call a local commercial real estate agent. For exampleย Macdonald Realty, Avison Young, and Colliers International are just a few names in the greater Vancouver area. Google them and contact one of their reps. Ask them to help you find a parking lot. Similar process to buying a house with a realtor.
  • Buy an apartment/condo that comes with a parking spot. Live in the building yourself, or rent out the condo to someone else who doesn’t drive. Rent out the parking spot (like these examples from Craigslist) and earn someย monthly income ๐Ÿ™‚

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Random Useless Fact:
Mosquitoes are more attracted to blue than any other color.

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Commercial Properties | real estate in VancouverJackLauren @Cheapstudents.caDividend investing MartinLiquid Independence Recent comment authors
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theoutliermodel
Guest

Who knew the parking lot industry was so lucrative. Well, actually I kind of figured, but there are some good numbers here to back up the observation!

JC @ Passive-Income-Pursuit
Guest

I think about this every time I go downtown for anything. Good price appreciation for the parking lot itself or even the land it’s on if it’s in a thriving and growing downtown area. Plus I’m sure there’s solid cash flow from a parking lot. It’s not like there’s a whole lot of maintenance, at least I wouldn’t think there would be. Definitely something to consider if you have the chance to realistically buy one.

Canadianbudgetbinder
Guest

That’s just insane the price of parking I couldn’t imagine at all paying that kind of money. I agree if you can find a place that comes with a spot, take it. Even if you don’t have a car, take it lol.. rent it out and make some $$$ unless of course there are provisions with that as well.

contactritap
Guest

What a great way to invest and get good returns. I never thought about parking lot. Good insights, thanks for sharing

Budget & the Beach
Guest

I actually think it’s a great investment because the upkeep is minimal! I actually rent my garage for $150/month because I don’t have a lot of stuff and there is plenty of street parking. It town close to mine, garage/parking is very limited so usually couples can only park one car there but prefer to have two just in case. It works out perfectly, although it does make me nervous that my landlord would be seriously pissed if he ever found out.

Thomas
Guest

Thats a lot of money! I heard about this with Pauline who says she rents parking spots. I never thought about it and to be honest there are a lot of ways to make money these days. Low maintenance and a great return.

Pauline
Guest

I wrote about making money renting your parking space recently, and a few readers suggesting buying one so thanks for running the numbers, I am always amazed at how much people are willing to pay just to park a car.

Vicky
Guest

I know that a parking spot goes for about $150 in my condo building, but that isn’t downtown either. What? You don’t have $20MM to drop on some land at Granville? ๐Ÿ™‚

Dividend investing Martin
Guest

I always favored commercial property as an investment rather than residential and having a parking lot as an investment is actually a cool idea. Very little maintenance compared to residential properties, I guess.

Lauren @Cheapstudents.ca
Guest

If only I had a few mill to throw around! Definitely not something conventional that people would think to invest in. If I ever decided to live in a condo in downtown Toronto I doubt I will get a car so renting out my spot would be some nice income ๐Ÿ™‚

Jack
Guest
Jack

An interesting way to invest in parking lots is through PKT-V, Parkit Enterprise. It’s a corp though, so you’d rely on capital appreciation to make money off this.

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