Property News

Parking your money in car parks

23 October 2006

A relatively new form of investment is off and running.

Parking space is often a factor investors take into account when buying a property. But until recently, rarely did investors consider buying only a car park.

With demand increasing for parking spaces in the Melbourne CBD and inner suburbs, a new market has emerged. This has seen car parks bought for one of two reasons - most popularly as an investment and also for personal use.

Investments in car parks take two forms. Similar to the development process for high-rise apartment towers, buyers in car park towers are sought before they are built. Car parks are also bought and sold on the open market in the same way as established apartments.

The prices of these car parks vary considerably and investment decisions should be based not only on the up-front cost but also the earnings you can expect to receive from the investment. If there is a "tenant", you will need to consider the term of the agreement, the income, any outgoings and the capacity and mechanism for rent reviews.

Car parks for sale can be found on internet real estate sites, which tend to list them as vacant residential property. They generally range from $20,000-$55,000.

Alternatively, investors can approach real estate agents in the inner city.

Independent legal and financial advice is as necessary for an investment in a car park as it is in other property and should be sought before committing to the purchase.

-- Enzo Raimondo, chief executive officer, Real Estate Institute of Victoria

Source: The Age