When you consider the current economic pressures a vast majority of Australians are facing, it’s no secret some are turning to side businesses to stay afloat.
Though there are endless options to choose from when it comes to finding an alternative revenue source, some Aussies are looking to lease or sell their private car parks.
According to Alice Stolz, the property editor of real estate giant Domain, car parks have risen in popularity over the past couple of years due to their relatively low upkeep and high property value.
“They’re definitely going up in value year on year, it’s because we can’t create more land, it’s something everybody wants,” Stolz told Drive.
While property investors typically gravitate towards private car parks as a premium selling point, the Domain editor said, “I do think we will start seeing younger buyers thinking ‘I’ll buy something that will get me a leg up on the property ladder’”.
Stolz said car parks are an ideal investment because they “don’t require much maintenance… levies are a couple of hundred dollars a quarter normally, so they’re fairly low levies. It’s a really appealing first stepping stone for many property owners and investors”.
Can you lease or sell your car park?
Yes and no, it depends on your circumstances. Generally speaking, if you are the homeowner of a private property (like a house or a unit) and the car park is under a separate title, then you could be able to legally lease the car park.
However, if the car park falls under the same title as the property, you might not be able to sell the car park as it technically belongs to the entire property title, meaning you would have to sell the home to generate profit.
In the case of apartment owners, real estate firm Nelson Alexander advised, “If you’re considering renting the space, carefully read the owner’s corporation rules to see what is and isn’t allowed”.
“In some instances, the space may be rented or sold to others living in the same building (there may also be rules dictating that the space can only be used to park the car, and not as additional storage),” a Nelson Alexander spokesperson stated.
Landlord consent must also be given if you’re a renter looking to lease out your property’s car space.
How much can I earn by leasing or selling my car park?
Generally speaking, leasing out your car park could earn you hundreds of dollars in monthly revenue. Michael Rosenbaum, the CEO of Parkhound – the online car park rental platform – previously told Drive, “The average Parkhound Host earns $200 to $350 a month from renting out their space”.
For reference, this one car park located on A'Beckett Street in Melbourne's CBD is listed on Domain, with the property owner asking for a $300 monthly rent fee and a 12-month lease.
When it comes to selling a car park, final purchase prices can start from thousands of dollars to well over millions. According to Nelson Alexander, “In Melbourne, inner-city car spaces sold separately to an apartment can go for up to $50,000”.
But before you get excited, it’s worth noting that having a car park on your property doesn’t automatically guarantee profit, and experts stated there are other factors that could contribute to the space’s pricing.
“Factors that influence pricing include the location of the space, the space type and amenities such as security,” Rosenbaum explained.
Stolz from Domain said, “It’s really important to understand the suburb that you’re buying in, location is everything when it comes to parking”.
Unsurprisingly, car parks in densely populated inner-city locations in capital cities like Melbourne, Sydney and Brisbane typically command the highest premiums, given most residential developers are getting rid of on-street parking in these cities in favour of apartment complexes.
“I think councils in particular, in Melbourne, in Sydney, and in Brisbane, are developing more apartment buildings, they're squeezing street parking out, and bike lanes are taking over in many areas... the idea of street parking is becoming harder and harder to come by,” she told Drive.
Conversely, car parks in less populous cities like Adelaide are on the lower end of the price scale due to the fact that there's more parking availability and less competition among drivers.
Besides location, various amenities like security and undercover parking also add more value to the property.
“I do think more undercover secure parking will become more desirable because crime continues to increase. People who don't have undercover parking will always pay a premium.
“Many parking spots are not created equally these days; some of them have fantastic security, some have absolutely none, so people are definitely paying a premium for that,” the Domain editor explained.
Additionally, Stolz said the boom in electric vehicles could also play a factor in the value increase of car parks in the future.
“With the rise of EVs, we will also see car parks loaded up with everything in them to make it more desirable. More often than not, people who are using this for investment are going to want to ensure it comes with all the bells and whistles, and they will pay a premium for having charging stations on site,” she told Drive.
Ethan Cardinal graduated with a Journalism degree in 2020 from La Trobe University and has been working in the fashion industry as a freelance writer prior to joining Drive in 2023. Ethan greatly enjoys investigating and reporting on the cross sections between automotive, lifestyle and culture. Ethan relishes the opportunity to explore how deep cars are intertwined within different industries and how they could affect both casual readers and car enthusiasts.
