Investing in real estate is a big decision for most people. Therefore, it is important to consider all the factors that can add value to the real estate property. While location, size, amenities, and condition are a few of the major things to keep in mind before making a purchase, there are other aspects as well. Should you buy parking with your condo? The market evaluation of parking spaces is constantly increasing, which makes it a must make an investment. However, due to the rise in demand, the price of parking space has also increased. Let’s find out if you should really get a parking space with your condo.
What is the need for parking?
One of the biggest misconceptions that most condo buyers and investors have is that parking space would only be useful to those who have a car. That is certainly not the case. Buying parking can be a great investment that can lead to great returns in no time. The need for parking is constantly increasing, which means the fees will also be on the rise. Therefore, parking rentals are bound to become a great option for most owners with a parking space.
Here are a few basic things that you should know about parking spaces before making a decision.
Availability and Affordability
Most of the condo communities will provide the owners with an option to purchase a parking space as well with the unit. One important thing to keep in mind here is that parking spaces are usually fewer compared to the number of units in the community. Therefore, there will certainly be a competition for it.
Aside from that, there will also be monthly maintenance and taxes that you will have to pay for the parking space that you get. So, before you decide whether you can actually afford a parking space or not, you should also keep in mind that you will be paying for these additional things as well.
Do you own your parking space?
In some cases, the parking space might be on a separate property. So will that be your own parking space? You will get to know about it once you make an offer to purchase a unit. You will get a status certificate for the condo, which will have all the necessary details. So make sure that you find out whether the parking space will be owned by you or not.
Will you be able to rent it out?
You should also consider if the community allows you to rent out the parking space or not. This will vary from building to building as per the bylaws. Check with the condo board of the community if you are allowed to rent out the parking space or not. In some condo societies, tenants are only allowed to rent out the spaces to other tenants of the same society. So make sure that you are clear with the bylaws of the condo building and whether you can rent out your parking and only then you should make a firm decision.
Things to Consider
If you are planning to purchase parking along with your condo, here are a few things that you must consider. Find out if buying parking strategically fits your investment plan or not.
• Small units
For those who are getting a one-bedroom unit or a studio in one of the more popular areas in Toronto for the purpose of renting out, parking might not be a must. However, it will be an added advantage if you can afford it and if the tenants will require it.
If you have a smaller unit in Toronto, you can keep parking as an additional option, but it won’t be a certainty that you will get a quick return on the investment.
• Large units
If you are investing in a large condo unit such as a two or three-bedroom unit, parking space can be of great importance. There are high chances that people who will be getting these units on rent will have a vehicle. Therefore, having a parking spot can get you better returns.
Access to public transportation in that region also matters. If you are buying in one of the better neighbourhoods such as downtown Toronto, there will be sufficient options to travel via public transportation. Tenants will be in close vicinity to the TTC and will have direct access to most places in the city. Therefore, there are chances that the tenants would prefer commuting via public transportation instead of getting a vehicle.
How much can the parking cost?
Over the past few years, the market value of condos has been on the rise, and the same is the case with parking spaces. At present, the average price for parking space in condos in Toronto is between $50,000 and $70,000. In some of the more desirable places in the city, prices for parking might even be higher. Some luxury residential units have parking space for $100,000.
How valuable are parking spaces going to be?
A lot of people in Toronto now prefer to commute via public transportation or opt for healthier options such as cycling. You might be thinking about whether buying a parking space will be a financially beneficial decision or not. However, you must also consider the number of parking spaces that condo developers are creating. There are fewer spaces than the number of units, and that is what makes parking space a hot commodity.
Getting a parking spot can be a great source of income if you are looking to rent out the unit or if the condo board allows parking rentals. You should consider all your options though and not fall for making a hurried decision. Check out the bylaws of the condo board of your community and also decide on a budget. Keep in mind the regular fees that you will have to bear as well.
Parking can be a deciding factor for a lot of investors. Analyze your options properly and find out if purchasing a parking spot along with the condo will be a good investment or not.
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