The rising cost of parking
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 🙂 “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. 🙂 Unfortunately when I found out about the following listing the property was already sold so I missed a good opportunity to buy a lucrative lot in a high traffic location.
Not that it matters because I don’t have the kind of money to buy it anyway, haha. 😀
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. 😀
Investing in parking lots
Owning a parkade seems to be a good way to diversify one’s investment income. Not only do prices rise over time, but they also provide income potential. And there is very minimal upkeep to maintain a parking lot, kind of like maintaining farmland.
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 example 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 some monthly income. 🙂
Random Useless Fact:
Mosquitoes are more attracted to blue than any other color.