The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: kenmoremmm on May 18, 2018, 02:52:35 PM
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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
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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.
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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.
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Yes, and raise the condo rent by $175 per month.
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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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$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.
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Well, what did you decide, @kenmoremmm?
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still looking into it. my wife might have misled me that there was actually a stall for sale.
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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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