Carparks

[peat]

Has anybody here considered becoming a carpark mogul.

Having painlessly rented out the carpark I acquired with my AKL CBD apartment for a year and half, the idea occurred to me that they are an unidentified niche in property investment and with the rash of apartment buildings going up and most of them only providing carparks for a small percentage of the units it seemed to me quite possible of a huge shortage manifesting itself over the years.
The Herald ran an article over the weekend highlighting some craziness occurring in the current prices.

[Halebop]

The Auckland carpark market is looking just as frothy to me as the rest of the property market. Its arguably more sensitive to local government whims than many property investment categories because supply of it is artificially restricted as part of the broader transport policy. There were certainly some good buys available in the mid 90s (I came very close to buying some myself) but the yields now aren't so convincing. Cash flows tend to be good though - not much in the way of carpet or fittings to periodically replace. I suspect the council will feel political pressure to provide more supply as Transit complete some of the motorway improvements around the CBD and as more retailers appreciate the size of the growing urban population.

Some sort of downsized/hybrid bulk retail catering to CBD furniture, appliance and homeware buyers is probably viable too. As a former CBD dweller I sold the car but buying big ticket stuff in person became that little bit more challenging. With the mobility and "urban sophistication" of many CBD dwellers, I think many such goods are smaller, more expensive and bought / replaced more regularly.

[peat]

http://www.nzherald.co.nz/section/st...ectid=10380032

see at the bottom of the article
loss of 197 carparks....

me wonders if this attrition due to roading dvlpmnts will continue!

[patsy]

Carparks are the only property investment that I absolutely love because:

(1) it is truly maintenance free
(2) in the Auckland City area demand far outstrips supply
(3) and, more importantly, it is much.much easier to deal with companies as "tenants" rather than with individuals.

However, an understanding of the rules and regulations, not only current but previous, is necessary. For example, I almost blew it when I was just about to buy one for myself in the Farmer's building when I realised that the width did not comply with current regulations but with the smaller sizes allowed by previous legislations - efectively it was so narrow that I could not have open the door and exit the car.

I bought a few carparks over the past years ranging from $30K to $50K, all centrally located around Albert and Customs Streets - never regretted it.

[patsy]

....best way to check the demand for carparks is to ring Wilson or Tournament carparks and ask them the waiting time for a monthly pass in any carprk around the city area.... You'll be shocked by the number of people in the waiting list!!!

[peat]

cheers for your input Patsy.
HaleBopp - you're probably right in indentifying some of the impact of the market that isnt free-enterprise i.e council which does add risk in the same way that Govt has now added a lot of risk to Telecom and, I dont quite follow some of what you wrote esp the 2nd paragraph
"downsized/hybrid bulk retail catering to CBD furniture, appliance and homeware buyers " what are you on about here??

[Halebop]

quote:Originally posted by peat

HaleBopp - you're probably right in indentifying some of the impact of the market that isnt free-enterprise i.e council which does add risk in the same way that Govt has now added a lot of risk to Telecom

This is exactly the opposite. The regulation risk with TEL was on the downside, with carparks the downside risk comes with DE-regulation.

quote:Originally posted by peat

and, I dont quite follow some of what you wrote esp the 2nd paragraph
"downsized/hybrid bulk retail catering to CBD furniture, appliance and homeware buyers " what are you on about here??

...a twist on the "homewares" bulk retail concept. CBD values preclude the same scale but many CBD dwellers don't have easy access to some quite mundane brands and services. Not so much to do with car parks although its impacted by the cost of car parking - more car ownership.

[CJ]

quote:Originally posted by patsy

I bought a few carparks over the past years ranging from $30K to $50K, all centrally located around Albert and Customs Streets - never regretted it.

What do the banks think? Do they give residentail rates and 80% loans?? (or are you cross-collateral?).

Do you manage yourself or sublet via wilsons/etc?

[patsy]

quote:Originally posted by CJ

quote:Originally posted by patsy

I bought a few carparks over the past years ranging from $30K to $50K, all centrally located around Albert and Customs Streets - never regretted it.

What do the banks think? Do they give residentail rates and 80% loans?? (or are you cross-collateral?).

Do you manage yourself or sublet via wilsons/etc?

I have a revolving credit facility with Westpac, collateralised with the carparks at 75% of QV valuation, and running at residential rates. I managed them myself (it rquires very little time and management, actually). I got tenants by approaching directly a few offices within walking distance. They are rented directly by companies as such, not by the individuals, and this makes things safer from my side.

[GB]

Great info Patsy -