Investing in a parking space or garage remains a profitable investment and less risky than buying an apartment, provided you take out a mortgage, more attractive than a consumer loan and carefully select the location. Advice from our experts for a successful investment.
Optimize your purchase with a mortgage
If you only buy one car park, it is likely that your loan will not exceed $ 75,000 including notary fees.
Even if it is possible to opt for consumer credit, we advise you to finance the purchase of your parking lot with a mortgage. On the one hand, you will benefit from historically low rates and on the other hand, you can borrow over a relatively long period.
Fixed rates at the lowest
Economic conditions in the dollar zone should make it possible to maintain a low-interest rate policy. Even if you don’t have an immediate real estate project, there is a good chance that you can still borrow at low cost in a few months.
I calculate my monthly payments
If you are at the research stage, you can perform several simulations in order to choose the ideal duration and calculate your monthly payments.
This step is decisive for anyone wishing to establish a coherent investment budget. You can also use our simulators to calculate the duration of your mortgage or to determine your borrowing capacity.
The choice of location
The acquisition of a car park meets the same rules of prudence as those which apply to a real estate transaction. If it is clear that the investor realizes a good deal with the purchase, the investment in a parking lot has its own characteristics.
Existing car parks and the importance of the public transport network
Whether you choose a box or a simple parking space, the keyword is location. To make the right choice, you will have to be very attentive to the environment.
The first element that you must take into account is the public parking offer (excluding relay parking lots): are the public parking subscriptions fully booked? Are there several free parking spaces or are there parking meters on all the streets?
If the neighborhood contains a majority of new housing, be aware that these are generally designed with covered and secure parking.
Box or parking area: the criteria to remember
More expensive to buy, but safer than a simple location, the box also has the advantage of being a warehouse. In return, you will have to maneuver to open and close the door before you can park.
If the box is in a condominium, you must first check whether the regulations allow storage.
On the other hand, depending on what you are storing, a declaration to the insurer may be necessary. Finally, if you rent the box, consider inserting a clause making the declaration to insurance compulsory, especially if you rent to a craftsman.
Other criteria are a real plus because they can make life easier for motorists.
- Lighting: think of your tenant. Women hesitate to park their car in a dimly lit place.
- The covered car park will protect the vehicle from the weather.
- Closed, it provides additional security.
- The dimensions of the locations: check that the movement is easy. Wide aisles, no particular obstacles making maneuvers difficult,
Profitability: take into account costs and taxation
If the operation is carried out for a rental purpose, we advise you, once you have determined the amount of the mortgage which is used to finance your purchase, to establish a forecast balance sheet and to simulate the profitability of your investment.
, you will have to take into account the following expenses:
- Co-ownership fees (if applicable)
- Property tax
- Taxes on property income.
Read our full dossier on property taxation in car parks, boxes, and garages.
Note: if your annual rental income does not exceed $ 15,000, you can opt for the microfinance. You will benefit from a 30% reduction on the rents received
The rental lease
Easier to manage than an apartment, renting a parking space does not require any particular formality. For example, you have no diagnosis to make. You can also leave at any time and practice the rents you want. Finally, don’t forget that businesses are very good tenants and are often looking for parking near their offices.
Namely: the ALUR law which strengthened the rights of tenants does not apply to park lots and boxes.