Buy and rent out a car spot. A new investment opportunity when you can't afford an IP?

Mr BoMBAStiG on 23/07/2015 - 16:44

With the emergence of services like Parkhound or Findacarpark I have heard stories of people buying car spots in high demand areas and renting them out, Airbnb style.

Car parks are selling for prices that match the amount of money a lot of 30 year old couples have ready to put down as a deposit. You may even be able to talk to the bank about a mortgage of sorts?

Assuming the average car spot in a CBD sells for $70k and you can earn $4.8k per year on it, you are getting decent returns with very little maintenance.

What are your thought OzBargainers?

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Comments

  • modsec802 on 23/07/2015 - 20:47
    +4

    Soon car parks will be in a bubble also and out of reach so people will be able to purchase a single public toilet as an investment. Junkies make good clients.

  • Heizenberg on 23/07/2015 - 20:53

    i didnt even know this was a thing

  • Logical on 23/07/2015 - 23:16

    There will be body corporate fees to pay and council rates too. Banks generally don't lend for apartments under 50M2 so I would say that you will need to buy it for cash. A cash buy means that you can't maximise negative gearing as no interest expense to claim against, thus a higher tax bill eating into your 'car park generated income'.

    • enforcer on 24/07/2015 - 13:13

      You might be able to get another kind of loan, albeit at a higher rate.

      • Logical on 24/07/2015 - 13:17

        ouch!

  • Steptoe on 24/07/2015 - 06:05

    Curious if the $4.8K return is net, or gross?

    • Mr BoMBAStiG on 24/07/2015 - 07:46

      I pulled the number out of the air as an average from the various sites I read when researching this.

    • eclaw on 24/07/2015 - 14:07

      I'm guessing net…a quick google suggest 6 - 8 % gross for Melbourne and Sydney
      Factor in tax and agent cost, 4.8% sounds about right

      Although they do mention that capital growth tends to suck pretty much all the way, mostly increasing with CPI only

      I guess its a decent enough investment as an alternative to stocks - you probably won't see demand dip for parking in the CBD if the stock market crashes tomorrow.

    • eclaw on 24/07/2015 - 18:13

      Oh I read 4.8% lol
      4.8k = roughly 7% on $70k
      that's probably gross then

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