Why car spaces are a good place to park your cash

It might not have kerb appeal but there’s one property investment that’s almost certain to attract visitors.

Buying a carpark could also prove a to be a wheelie good deal for one shrewd buyer.

Geoff Cooney of Taplin Real Estate is selling parking spaces from $48,000 in the Hindmarsh Square Car Park at 200 Pirie St.

He says carparks are profitable and require little capital outlay compared with traditional city real estate investments.

“They’ve come of age to the smaller investors now because the city has a lot more office space being created,” Cooney says.

“What’s also fuelling this interest is that the number of high-rise apartment buildings has really reduced the number of low-level or ground level sites – and a lot of these don’t have carparks.

“There’s a shortage of parking spaces and the council is reducing the number of carparks to make way for bikeways and pedestrian ways and things like that too – all of these things are contributing to demand.”

A report to Adelaide City Council last year said more than 100 on-street parking spaces had been lost between 2016 and 2019. But Adelaide is considered to have among Australia’s highest proportion of off-street parking spaces.

Premium parking sites in the Pirie St complex fetch about $60,000, and Cooney says he has sold spaces in other complexes for about $65,000.

Taplin Real Estate’s Geoff Cooney in one of the parking spaces available at 200 Pirie St, Adelaide. PIC TAIT SCHMAAL.

While some may see $48,000 as pricey, a George St, Sydney park is on the market for $150,000.

Cooney says parking spaces at Pirie St earnt investors $290 a month from the building and strata manager Care Park – the equivalent of a 4% annual net return.

“Of that money, owners have to pay council rates, water and sewer fees, the emergency services levy and strata fees, and these total between $1000 and $1100 per year,” he said.

“Getting a 4 per cent return in this market is pretty good even on this small amount.

“At the moment, you’re probably getting between 1 and 1.5% interest in the bank.”

SA Real Estate Institute president Brett Roenfeldt says parking spaces are an attractive investment given the RBA cutting the official cash rate this week. “You own a piece of concrete and are getting a reasonable return on it,” Roenfeldt says.

“I’m not suggesting people buy 10, 15 or 20 of these, but to add to your portfolio, it’s a very affordable way to get a reasonable return on your money.

“With the amount of development within the city, carparking has become an absolute premium, and this shows a reasonable yield, and there may also be potential for good capital appreciation.”

This article from The Advertiser originally appeared as “Park your cash in this savvy little investment”.