Buying a carpark in Auckland (or anywhere really)

[MarkButThis]

I am looking at buying a carpark in Auckland. ..

Does anyone have any experiences of owning carparks? Are they a reasonable investment on their own?

What happens with the carpark management and building leases etc that the carparking firms must somehow cover? And is there bodycorp or anything like that?

My reasoning for purchasing...

I currently lease a carpark in Victoria st for $205/month. Purchasing a carpark for around $30K would result in a $175 per month interest cost at 7% (presumably fixing for a few years). The saving could then go towards reducing the principle.

My feeling is that this is a good idea, but there is a risk associated with having a $30K debt which isn't really being paid off and also a later risk of interest rates rising which would kill the deal etc

Thoughts?

[buxlo122]

one positive is inflation will errod the loan balance.

One issue is how long you plan on holding the car park for.

Other risks could be congestion future congestion charges, public transport improvements, gas prices etc.

[Davo36]

I've thought about doing this quite a few times. With the idea that I could lease it out during the day but have the use of it, say after 6pm. And then I would have a free car park in town that I could use if we were going out on the town.

But the returns in recent years have been pretty abysmal.

They do have body corp normally MBT, and rates. And I guess you'd have to pay GST on the rental too.

In today's Herald there's 2 carparks in the Farmers bldg in Auckland for lease at $170 pcm each. It's been in the paper for a few weeks. So that's $2040 for a year. I assume that includes rates, body corp and GST. Take all that off and you'd only have say $1.5k per annum (if your'e lucky). These things are advertised for sale at around $35k so that's a whopping 4.29% return!

And of course the outgoings can go up at any time...

[kapitibeanman]

If in a building, basically airspace with a method of placing a car in it. If the structure needs high maintenance, or has that potential, you wouldn't want to pay a high price. In a $200 per month parking area, $30k seems quite cheap, but would seem expensive if the building had to be strengthened or even demolished. Are there lifts, how much life left in them, repairs history, lower floor more desirable, body corp minutes, all stuff I would look at. Besides the fees, which should be sufficient to keep the building well maintained & still leave you a decent net return. I can't see that capital gains/losses would do anything other than mirror ordinary mid-city residential movements.
From the sidelines, what I like about the idea is it seems more trouble free than your ordinary residential rental, with blocked sinks, leaking windows, noisy neighbours, condensation, broken dishwashers, stolen contents etc etc.
I would prefer a park close to where I also had some residential investment, just for some extra flexibility or synergy.

[Bob Kane]

A while ago the old Auckland City Council were opposed to new car parking buildings in the CBD and tried to reduce the number of car parks to discourage motorists.
This policy would make existing car parks rocket up in value - $100k or more in some classy buildings. Not sure what the new council's approach to car parks is - if it's unchanged then a long term plan would be to buy as many car parks as you could.

[CJ]

I did look at it ages ago but couldn't get the numbers to work. Bnaks were lending only 50% on apartments so thought I could spread risk by buying carparks instead (and still get the 50% finance).

Bob - carparks in Quay West go for $80k I have heard and Metropolis can be up to $100k.

I know a big multistory has just openning between the foodtown and britomart but that was needed as none of the britomart buildings have underground parking (some issue to do with trainings hitting them??)

I did see one interesting option a couple of years ago but wasn't in a position to move. A studio apartment at the bottom of federal street with 13 or 15 carparks attached. Per bodycorp I assume they couldn't be sold separately, hence them being attached to the cheapest apartment in the complex. Would have been a good option, especially if you could lease them all to one business in the surrounding area.

[Keys]

Looking at storage for a houselot of stuff. Plus the garage. Renting a single garage sized storage unit is around $300 per month. Purchasing one (twice the size) is around $463 per month on todays interest rates. Resale would be long and hard as they're not the sort of thing which goes fast around here. However, I can (and will) rent the unit when I've finished with it.

[VincyV]

Do you know what hapened to the Federal St parks ?

I did see one interesting option a couple of years ago but wasn't in a position to move. A studio apartment at the bottom of federal street with 13 or 15 carparks attached. Per bodycorp I assume they couldn't be sold separately, hence them being attached to the cheapest apartment in the complex. Would have been a good option, especially if you could lease them all to one business in the surrounding area.

I also had a serious look at it at that time.

[Davo36]

Here's a bunch of carparks plus a managers unit being sold at the moment: http://www.trademe.co.nz/property/co...-355182850.htm

The price in the Herald is $650k. With a valuation of $960k.

Edit:
I just rang the ad in the Herald and these are 2 different properties!

[muppet]

Price: To be sold by auction on 16 Mar

Therefore they weren't sold at auction?
I wonder what the top bid was?

[Davo36]

Yeah who know? It's all so non-transparent these days. You'd have to have gone to the auction to know.