Where there are tower blocks of condos, there are parking spaces. Where there are residential areas, there are parking spaces, and it is common for people living in a city to not own a car. So is that parking space going to waste? Possibly! A parking space could be rented out to 3 motorbikes, or to 1 car at a time. This could be a car for the working week, and a car parking space at weekends for shoppers. Savvy entrepreneurs look for opportunity in space, and a parking space has a lot of opportunity.
As a result of the rising demand for space in urban places, entrepreneurs are beginning to focus their eyes on parking areas as a plausible alternative source of money. The availability of investment opportunities has increased as a result of rising investor demand. According to Statistica, London is the most pricey place in which to operate a parking garage. In 2018, London remained the most costly city to construct in for the second year in a row. This was also the case with the development of other public buildings in the UK, which is not unusual considering the city’s reputation as a business and financial powerhouse in the world.
The notion is that as the volume of vehicles climbs — automotive organisations estimate that there will be 39 million additional autos on British roads just by 2030 – so will demand for parking. As urban parking spaces are limited, demand is projected to surpass supply. IBISWorld produced a similar study,indicating that the increased number of cars on the road has helped demand for car parking spaces.
One way for investors to cash in on this fad is to buy parking spots one by one and rent them out to tenants. In many cases, the tenant is a leasing firm that annually sublets the space to new clients. Still, there are potential downsides associated with making an investment in parking lots such as the operating business, rental rates, and emergency plan which are all crucial factors to evaluate throughout the due diligence process.
Parking garages are, for the most part, uncontrolled types of investment. Finding a reputable management enterprise that has a solid history and a proven record will be of great assistance in ensuring that the investment is handled properly and in accordance with the applicable legal standards.