Author Topic: Buy a Parking Stall for a Rental Property  (Read 878 times)

kenmoremmm

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Buy a Parking Stall for a Rental Property
« on: May 18, 2018, 02:52:35 PM »
We own a condo near downtown Seattle that we have used as a rental for the past 7 years. Street parking is kind of chaotic for overnight parking. We are trying to fill a tenant vacancy right now and one person was turned off by the parking available since she would be operating on a non-standard schedule.

I have long thought that owning a parking spot would be the ideal investment. This condo building has one for sale for $10k. Alternatively, we could lease one for $175/mo from someone that already owns one within the building. For reference, rent for this 1bd unit is roughly $1500/mo (there is about $350 in HOA dues covering all utilities, maintenance, etc).

So, two part question:
1. Would you opt for buying or leasing a parking stall if you thought it would be able to increase your rent by, say, $100/mo, and allow you to rent out the unit more quickly due to the perk?
2. If purchasing or leasing, would you try to declare this as a rental expense on Schedule E? I think if we leased it, one could make that argument. If we bought it, it might be harder to sell.

Thanks


sokoloff

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Re: Buy a Parking Stall for a Rental Property
« Reply #1 on: May 18, 2018, 03:39:28 PM »
At $10K for $100/mo [and likely fewer vacancy months over the next decade], I would absolutely do it.

I would think it would absolutely be a rental-related expense. You're providing it as part of the leased premises, every bit as much as the condo itself.

Telecaster

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Re: Buy a Parking Stall for a Rental Property
« Reply #2 on: May 18, 2018, 03:50:47 PM »
Oh hell yes.   If the parking space leases for $175/month, I imagine the rent increase would be close to that same number.   That's roughly a 20% rate of return.   Seattle is extremely hostile to new parking spaces, it will only get tighter. 

lhamo

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Re: Buy a Parking Stall for a Rental Property
« Reply #3 on: May 18, 2018, 06:32:33 PM »
10k seems pretty reasonable, given how limited parking is downtown.  It will make the unit more attractive when you go to sell -- my sister was looking for close-in condos last year, and would not consider anything that didn't have a parking space attached.  Many buyers are that way -- circling the block sucks....

FWIW, we detached our two parking spaces from the sale of our Beijing condo last year.  The parking spots on their own went for over US$70k.

calimom

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Re: Buy a Parking Stall for a Rental Property
« Reply #4 on: May 19, 2018, 09:08:19 AM »
Yes, and raise the condo rent by $175 per month.

Ocinfo

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Re: Buy a Parking Stall for a Rental Property
« Reply #5 on: May 19, 2018, 09:14:43 AM »
Yes, I would.

I looked into buying a garage parking spot near where I live but it would have cost $40k+ and rent for $250 so didn’t quite make sense. At $10k and $175 per month, it makes a lot more sense.


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Car Jack

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Re: Buy a Parking Stall for a Rental Property
« Reply #6 on: May 21, 2018, 09:24:39 AM »
$10k is unbelievably cheap.  And here I thought Seattle was expensive.  Offer $10k on a parking space in Boston and prepared for the 3 hours of laughter you'll receive.

Dicey

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Re: Buy a Parking Stall for a Rental Property
« Reply #7 on: June 12, 2018, 10:37:29 AM »
Well, what did you decide, @kenmoremmm?

kenmoremmm

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Re: Buy a Parking Stall for a Rental Property
« Reply #8 on: June 12, 2018, 11:46:59 AM »
still looking into it. my wife might have misled me that there was actually a stall for sale.

the_fixer

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Re: Buy a Parking Stall for a Rental Property
« Reply #9 on: June 12, 2018, 09:26:47 PM »
I purchased my first rental property this year a detached garage in our condo community and have been pretty happy so far.

It really has worked well the insurance, exterior maintenance and utilities are all covered by the $5 per month HOA fee. The garage door opener and one light inside are the only things that could break and cost me money so it is pretty low stress.

Purchased @ 19k cash

Had a renter in place with 10 months remaining on the lease at $180 per month.

I plan to bump the rent $10 - $20 if the renter wants to stay otherwise I will look at what market is and adjust accordingly.

Would love to buy a few more and imagine that a simple parking space would be easier to manage than a detached garage so I would say go for it.

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