In the UK I have an underground parking space two blocks away from the town center, next to several office buildings. It is the perfect place to put it for rent. I have never owned a car while living there, only a small scooter for the space has been rented for about 4 years. The last tenant was so happy she stayed for over 2 years then told one of her colleague to take over and I had no vacancy between the two.
If you are concerned about the tenant defaulting then in the UK you can use Your Parking Space and in the US there’s Parking Panda. These companies attract the tenants and collect the payments, taking payment worries away from you.
How much does a parking space rent for?
If you are in the center of town, look at how much street parking is worth per day, if monthly passes are available to non residents. In my area, you can have a yearly parking permit for $100 if you are a resident with no private parking. If you live in another neighborhood, you pay about $15 per day to park your car, and the council’s covered parking costs about $300 per month. So what I am competing with is $300 per month, not $100 per year, and my target is professionals coming from other boroughs to work here.
I started asking for $100 and immediately was inundated by demand, then raised to $120 with the last tenant, who was also really happy to take the space. I think I could get up to $150 but would find some resistance above that. Still, $120 is $1,440 per year, and having lots of applicants allows me to pick the very best. I have never had a default in payment in 4 years.
How to advertise your parking space?
If resident parking is complicated, your best bet is to ask your neighbors if they have a use for your spot. Put a word in the elevator or drop leaflets under their door with your contact number.
Second best is Craigslist and the local ad board. Put ads at the bakery, the supermarket, or the community center.
A few websites target short and medium term peer to peer parking rentals. Most have a fee paid by the user or renter, but they can help you reach a broader market.
Renting your parking space on top of the rent
I rent a three bed property in the same building, and could include the use of the parking space for the same extra $120 a month I am getting from the current tenant. BUT if the flat tenant vacates, he would vacate the parking space as well, leaving me without TWO streams of income. He may be replaced by someone without a car, so what should I do, keep the parking empty hoping that person will vacate soon, or rent it, only to find the person is going away next month and the third tenant really wants the now rented space?
Plus I have nice rental prices, and would go over the psychological price barrier if I were to add $120 to the rent, people may not even look at the listing. So it is a bit more complicated to draw two contracts and expect two payments, but it works better in my case. If you are renting a condo with a parking space and comparing prices to another listing without one, go through those considerations to see if it makes more sense adding the parking to the rent or not.
Renting on weekdays
One thing that seems quite popular where I live is renting your parking space during office hours. At 6pm, street parking is free until the next morning, so if people are working extra hours, they can move their car or you can park in the street while they vacate. But usually, since everyone works 9 to 5, you go to work at 830am, the guy parks in your spot at 845am, vacates at 515pm and you get home at 530pm. Weekends are yours.
My tenant uses the space only during working hours so I could try to find someone else to rent at night, the tenants I have in the flat above the parking space have often asked if I could rent them the parking too, but not being on site, I don’t want to have to oversee exception when one stays home sick and the other one can’t park that day, all the way from Guatemala. If you decide to take in two tenants to share the space, draw contracts with strict hours, and give one the phone details of the other so they can communicate directly if they want to amend hours.
Renting your driveway and garden as parking space
Another option I have seen advertised is people renting their driveway in a parking zone where permits are scarce and meter parking is expensive. They offer a flat rate, a bit lower than that of a covered parking space, and some even offer long term rate. I looked it up when I moved out of the UK and I had just bought a car so I asked for a rate to leave the car there in someone’s garden. The man had RVs, boats and all kind of vehicles parked in his back garden for a fee. You need space, but that is pretty passive income.
Have you ever made money renting your parking space? Would you consider it?