Take a 45 unit mid rise loft development in Atlanta with only 18 underground parking paces and you have a parking war. It's like NYC in downtown Atlanta. This situation fetched an absentee owner about to foreclose on a property 20K in cash. It's a little easier to walk away from your foreclosed home when you just make 20K by selling your parking space.
Here is the situation The seller of the parking space had a restraining order placed on him by another unit owner. What does this mean? This guy had to be a football field away from the other unit owner. HE HAD TO MOVE. Since the complex did not allow his unit to be rented and he cant live in it, his unit will foreclose.
Here is what is next This guy offered the parking space to all 45 unit owners. At the end of the bidding he ended up selling the space for 20K to an owner that owns 2 units in the building. Both of the buyers units do not have parking.
Is it worth it? With absolutely no maintenance the parking space can be rented out to another unit owner for up to $300 per month. That is cash flow of $173 per month if it's purchased for 20K on an home equity at 6.5%. Well the buyer figured adding a parking space would add more value to his units once he put it on the market. He is right! Units with parking typically sell at a 20%-30% higher price point.
This is very interesting. I never really considered the value of a parking space. But in a situation such as the one you describe, they are really VERY VALUABLE.
Posted by: RE's The Thing | February 11, 2008 at 05:15 PM