invest in a parking space: market, insurance and rentability

kinger101

sush40 wrote: »

Ok I quickly contacted the agency who sells the parking space so they can confirm the details and here they are:

- maximum rent to expect for the undercover parking space is £75per month (these are the most popular)
- maximum rent to expect for the open-air parking space is £70 per month
- expenses for insurance and service charges are £35 per month (do they cover all the maintenance charges or is it just the gate?) Cover everything including electricity.
- management fee / agency fee, your free to manage it and rent it yourself. If you want us to do it, we charge one month rent tenant find, managed 10%
- minimum tenancy period- 6 months

So basically I'll end up with 35 pounds a month after all the charges?
That's why I'm wondering if I can find a way to pay the insurance / service charges without going through the agency (I know i could, but how?)

If it's income you're looking for, based on the figures you've quoted, it would be better to go for high-dividend shares/funds under an ISA wrapper.

Shielded from CGT/IT. Potentially more diversified. Less effort. More liquid.

If you're determined to do this, make whoever collects the service charge an offer, and find an insurance broker.

kinger101

sheff6107 wrote: »

Because you're assuming it's a) worth £10k and b) you'll recoup at least £10k when you sell it on, either on its own or added to the flat.

If you want to sell the flat in 3 years it might only add £4k to the asking price, which means you're £3.5k down.

If you're buying to rent out you still need to do the sums, not assume you'll make more than £10k in the future and the rental money is free cash.

How much would you save paying £10k off the mortgage as well, for comparison?

It's real estate though. Not usually regarded as a depreciating asset. The parking space doesn't need to be sold with the property. It would be of interest to others in the building too.

ComicGeek

sush40 wrote: »

- maximum rent to expect for the undercover parking space is £75per month (these are the most popular)
- maximum rent to expect for the open-air parking space is £70 per month

Love the vague 'maximum rent to expect' - have you done any research into this and found what the likely rent would be? I've just looked on a couple of parking space websites for Manchester, and range from £35-£250 depending on exact location, BUT lots of spaces on offer so suggests to me that there's an over supply.

sush40

I did some research and I can tell parking spaces are rented at around 60-90 pounds a month in the same area. But I agree, even though the demand is high in Manchester I noticed we can find a lot of spaces on offer on websites such as gumtree etc.

I wasn't planning to reimburse the 10K I'd spend as this is for an investment (instead of leaving them on a saving account).

I really didn't think the service charges and insurance cost would be so expensive (almost half of the rent in this case) for a parking space.

tim123456789

sheff6107 wrote: »

Because you're assuming it's a) worth £10k and b) you'll recoup at least £10k when you sell it on, either on its own or added to the flat.

well of course I am

but it doesn't seem the slightest bit unreasonable to assume that

10K for a parking space in a sought after area is not at all an unusual price to pay, and not at all unrealistic to expect it to hold its value

(the unusual part here is that it's being sold for someone to rent out, not for their own use)

tim123456789

sush40 wrote: »

I really didn't think the service charges and insurance cost would be so expensive (almost half of the rent in this case) for a parking space.

I agree


really kills the whole thing stone dead IMHO

bluesnake

Yes, and if you are not careful you get the spot with a big pillar that only comfortably fits a Smart without scratching it, or you have to reverse in backwards with the passenger door inches away from the wall, etc.

There are some of these going around Watererloo Station, but there are many to rent too

Looked into it and passed the deal over.

sush40

I went to see the spaces and they aren't too bad at all, considering the price (I've read a parking space costs around 15 to 25k in a big city) and the location (5min walk from manchester CC).
The only catch would be the expensive service charges. How come they are so expenive? The buidling was built in 2003 apparently and nothing looked too old to me

Marvel1

What happens if someone parks there when they shouldn't, who have access to the csrbpark?

booksurr

sush40 wrote: »

The only catch would be the expensive service charges. How come they are so expenive? The buidling was built in 2003 apparently and nothing looked too old to me

so it is over 10 years old and in need of routine maintenance on a rolling programme, some of which may already have been done hence "looks new"!

service charges are obviously based on one of 2 possibilities:
a) minimal annual charge covering just the basic annual costs such as insurance, utilities etc with the proviso that any repair work is the billed for separately as lump sums (which can be an unpleasant shock those unfortunate to live there at that time)
or
b) be "high" so as a to build a pot of money which then pays for the big bills and (in theory) avaoid s the need for current residents to have to foot one off large bills as the cost is averaged out over many years and countless residents - the so called "sinking fund"