Maximise Your Kerb Appeal by Investing in Parking
What facilities do modern tenants really want? If you answered parking, you’d be right. Research by Zoopla has shown that the number one priority for renters is a secure spot to leave their car. Both ‘parking’ and ‘garage’ were the top two searches in the Zoopla keyword tool, demonstrating the power that investing in parking can have over the long-term life of an investment.
In an attempt to find the common factors that appeal to different kinds of tenants, parking emerged as the top requirement – hardly surprising when you consider that the average motorist in Britain spends nearly four days a year searching for a place to leave their vehicle.
According to Annabel Dixon, spokesperson for Zoopla, “Garages and parking were consistent requirements for tenants across the UK.
“Although this may not be the most interesting feature of a property, the research provided by Zoopla has clearly shown that landlords can make their rental homes much more appealing by enhancing existing parking or creating a new parking space. Whether this includes a driveway, landscaping a garden or applying to drop the kerb outside the property, these transformations could pay dividends.”
Similarly, surveys from estate agents across the UK have revealed that almost ⅓ of tenants would pay more for a property if it included high-speed internet, parking or they could live with their pet. All of these factors have a broad appeal across a range of life-stages and typically make up the amenities that the modern tenant prioritises.
Wealthier tenants are also typically prepared to pay more for private balconies, en-suite bathrooms, on-site gyms, off-street parking and scenic views, all of which could be considered clear signs of quality. This search for quality and desire for better accommodation means property that has these attributes will typically perform better in the rental market, especially at the heart of towns and cities where these facilities are rare.
The value of parking can’t be understated either, particularly if it’s located in a prime urban area. A study by YourParkingSpace believes that parking can add anywhere between 5% and 10% to a property while Phil Spencer, host of Location, Location, Location goes one step further – he believes that a prime city property can add £50,000 to its overall value with the addition of parking.
So how can investors take advantage of the ‘power of parking’? The obvious answer is to look for properties that have parking and utilise it when hunting for tenants. The more amenities you have available to you the better – parking is key in attracting quality tenants and thus, quality income.
Iron House in Slough is a prime example of a development designed around what the modern tenant wants. Aside from being located within walking distance of Slough train station and Crossrail, Iron House can also offer secure underground parking meaning increased security, privacy and market appeal. As a gated development, it’s built to offer exclusive community living and the benefits that come with that.
Should You Invest in a Car Park Space?
So we’ve established that parking spaces are in demand – especially in dense urban areas – but should you be investing in a parking space alone?
While it’s a less common form of real estate investment, investing in a car park space rather than a development with parking is becoming more popular for those dipping their toes into real estate investment.
As you’d expect, despite lower returns than a full property investment, the lower upfront cost is a major benefit for many investors. Buying a single space is obviously much cheaper than an entire residence and while premium parking spots in major cities such as London can sell for a fortune, the majority of spaces are much more affordable.
Parking spaces are also typically quite flexible and can be rented out on an hourly, monthly or even yearly basis – ensuring the investor receives consistent income.
That said, it’s important to remember that all investments require due diligence. For example, if the parking space is in a bad spot from the get-go then finding consistent returns will be an issue.
Similarly, long-term returns are much more susceptible to the ‘market’ changing. If a parking garage is built in a better location nearby, you may suddenly find your investment is useless.
At the same time, ridesharing apps such as Lyft and Uber are risks that needs to be considered, especially for drivers in prime urban areas where car parking spaces would usually fetch a premium.
For many investors, parking spaces are better used to enhance a ‘traditional’ property purchase – offering another benefit for potential tenants whilst maintaining the relative security of a full real estate investment.
If you’re looking to invest somewhere that can deliver consistent returns and also be in demand with tenants, these are the features that you need to identify, especially in prime city centre locations that are already investment hotspots. In short, maximise your kerb appeal – you’ll stand out from the crowd.