People are looking for alternative sources of income like never before. More often than not, they are attracted to ‘passive’ sources of income that assure guaranteed returns after the initial investment and not requiring much effort on their part either. In this scenario, the option of investing in real estate has always lucrative. There is another option in real estate investment, which is slowly but surely becoming popular, but not much is known about it either. This is the field of buying a city parking space as a real estate investment. How does this work and is it a good investment that will pay rich dividends for investors?
In most of the major cities of the world and urban spaces, parking space is considered a premium because of the lack of free land otherwise. Most of the existing parking spaces have been lapped up by developers to be converted into other projects, whether they are shopping malls or condominiums or other projects. Land is always at a premium. With more and more shopping malls and residential projects being developed, parking space is getting more and more difficult to find nowadays. Even though most shopping malls have their own parking space either on the rooftop or in the basement, thus not requiring as much parking space, other projects are in need of such space.
Another reason why parking space is selling at a premium is because of the increasing ownership of vehicles among people today. With increasing incomes, a booming economy, and increasing disposable incomes, more and more households have more than one car. This increases the number of cars on roads at some point in time and cars do require parking space! You cannot drive along for hours on end nor be always in shopping malls to get a parking space! Especially housing projects are in dire need of parking spaces. This is the reason why permanent parking spots in condominiums have been sold at a never-before heard of price, in the range of $50,000 to $80,000 for a parking spot!
Is there another reason to invest in the parking space?
With real estate selling at a premium, and there being less and less plot suitable for developing into residential or commercial projects, developers are increasingly looking into buying parking lots and converting them into the projects of their choice. In the United States, New York happens to have parking markets that are the most expensive in the entire country. Numerous parking garages located in prime locations have sold for millions of dollars, ranging from $14 million to $28 million at a time!
In 2012, a study released by The Center For Urban Real Estate, under Columbia University, stressed on the importance of developing parking lots into other commercial or residential structures. It follows that people who hold investments in parking spaces are slated to get huge returns on their investment soon.