What is a garage worth?

bouicca21

I lease a garage in a block that will be knocked down and rebuilt at a size that will fit a modern car.  It seems that it might be possible for me to lease a second (currently derelict).  I’d then be on the hook for the rebuilding of both.  

So what is derelict garage worth (London zone 4)? What value if any might having two garages (or a double garage) add to my property ? No electrics so a future owner would probably not be able to use it for a workshop.

pinkshoes

Well why not start by looking at something like JustPark.com to see if there is any demand in your area for parking and how much the daily/weekly rent is?

Zone 4 is meaningless. Do you live in an area where parking spaces are like gold dust? e.g. lots of terrace houses or blocks of flats? Do you leave near any arenas or event places where people are likely to want to park?

eddddy

Two different ways of valuing the garage might be:

1. What have comparable garages in the area sold for recently?

2. "What would your property sell for with 2 garages?" vs "What would your property sell for with 1 garage?". You could ask some local estate agents for their opinion.

(Is a typical buyer for your property likely to be a "one car family" or a "two car family"?)


Obviously, if you bought the garage - you could choose to sell it later as a stand-alone garage (assuming that the lease allows that), or as a second garage for your property.

Section62

bouicca21 said:

So what is derelict garage worth (London zone 4)? What value if any might having two garages (or a double garage) add to my property ? No electrics so a future owner would probably not be able to use it for a workshop.

Is the garage/area reasonably safe and secure, and will the replacement be reasonably dry?  If so, I'd personally value the second garage as storage space - so the rent for a comparable storage unit in the local area might be illuminating.

bouicca21

Thank you all. Firstly yes the new garage would be secure, and a 10 minute walk to a station. 

Gumtree has several garages in the general area up for rent, but the asking rents are all over the place.

A pair of garages about a mile away were up for sale at £26,000 and are marked sold stc.  Streetview shows they are in good condition. Too soon to know what the actual sale price was.  Short lease.  I understand about extending leases on residential properties, no idea how it’s done for a garage, and maybe the sort of person who buys a garage doesn’t care (?)

Land registry sold prices are interesting. It seems there are lots of extraordinarily cheap ‘other’ properties round here. Difficult to tell what they are.  However some are clearly identifiable as garages.  Again prices all over the place. A garage just up the street, on an ex local authority development, probably at least  60-70 years old, sold for £10,000 last year. Two at the other end of the road sold for £17,000 (2020) and £20,000 (2021) respectively. Streetview hasn’t been that far (nor have I) but the garages are part of a mini Span estate, possibly more 1980s than 1960s.  

I think you have helped talk me out of the idea.

RHemmings

According to a google I just did, renting out a garage in London may return a monthly rent of £228 per month. 

Given some of the prices of garages up above, this looks like a reasonable investment. Depending on how much a a garage that actually gets £228 per month actually costs. It appears that standalone garages are not dwellings, and therefore there isn't any council tax to pay. I would guess that maintenance on a garage wouldn't be that expensive; same for buildings insurance. I would guess that to make a typical garage easy to rent, then on top of the purchase price, some refurbishment should be priced in. I would guess that a garage would have electrics for lighting and potentially the door, but no gas or water supply. Possibly a garage with a built-in EV charging point would be attractive to a wider range of people.

I'm also guessing that the rental contract for a garage and the legal points that need to be satisfied would be less onerous than a standard BTL of a dwelling. 

I'd appreciate it if anyone could point out what, from the above, I have wrong. Any further advice would be interesting. I've not thought of doing this before, and further research may rule it out, but I am considering the above seriously. 

eddddy

bouicca21 said:

I understand about extending leases on residential properties, no idea how it’s done for a garage...

You usually have a statutory right to extend a lease on a residential property... the freeholder cannot stop you. And there is a statutory formula for calculating the price.

But you don't have a statutory right to extend the lease on a stand-alone garage.

So the lease can only be extended if the leaseholder and freeholder can mutually agree terms.

(And the freeholder is free to say "no", or to demand a stupidly high price.)