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How to price a parking space lease?

1,298 Views | 7 Replies | Last: 2 mo ago by TxAG#2011
Ryan the Temp
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AG
I'm buying a condo that comes with a parking space I don't need, so I'm looking at leasing the space to someone in a unit that doesn't have a parking space. Any suggestions on a good way to determine an appropriate price?
agnerd
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AG
Storage lot near me in the burbs charges $130/mo for an uncovered RV space. I'd say at least $65 a month for your space. I'd make sure to have a stipulation that it has to be a running passenger vehicle stored there so someone doesn't junk up your lot.
Ryan the Temp
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AG
I got some more info after I posted - Apparently the space has a value of $20,000. At today's rates, that would be the equivalent to a chunk of about $130-$135 in a mortgage.

Any idea if there is any sort of standard or customary percentage or other calculation based of the value? Based on the value I don't think it would necessarily be unreasonable to ask $100/month, but I'm not super confident in that.
Diggity
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AG
how big is the complex? have any other owners rented out spots?

My wife's place had a decently active secondary market for spaces. The price would vary based on location and they shopped them on the community message board.
Ryan the Temp
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AG
39 total units. 6 of them do not have parking available to them. The unit next to the one I'm buying doesn't have a parking spot, went under contract the same day we did, and the buyer is interested in discussing a lease for the space.
FincAg13
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AG
Not sure where you are located, but if downtown, you can look at what the monthly contract rates are in garages close to you. Potentially add a little for convenience of being onsite instead of walking to different garage.
redaszag99
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If it is valued at $20k, I'd try to at least charge $200 a month or 1%
TxAG#2011
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Ask your realtor if they have any experience in this, if not, see if there are any comps in the development.

Mathematically you can apply a cap rate to the value. Super janky but say take 7% of the $20,000 value = $1,400 annually or roughly $120/month.
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