Do the math: Buy a parking space or start a real estate empire?

Landing parking can run up a bill of around $300,000 in some of NYC's priciest neighborhoods

TRD WEEKEND EDITION /
Aug.August 11, 2018 12:01 PM

(Credit: KoiQuestion, Pixabay)

“If you have $300,000 and are willing to part with it for a little bit of concrete, cool–you’ve got a parking spot,” or you could use the same money to launch a small rental portfolio.

Constantine Valhouli of real estate market research firm, Neighborhood X, ran the numbers after a “car condo” opened near his Cobble Hill home charging about $300,000 per spot plus taxes and maintenance fees.

With parking spots selling for between $200,000 to $400,000 in NYC’s priciest neighborhoods throughout Manhattan and Brooklyn, Valhouli calculated that buying a two-bedroom Bronx apartment for $300,000 and renting it out for $1,900 would pay for the lease of at least two parking spots in one of the city’s monthly rental lots.

“If you buy one of the car condo spots for $300,000 in cash, there’s still a monthly maintenance fee of $300 per month, which is the same price you were paying before to rent the spot. [You have to think], ‘Wait, I’m paying for this thing twice?'” he said.

Though parking rentals are still the dominant answer to New Yorkers’ parking needs, the market for car condos is steady, according to Valhouli. After all, he added, “there’s enough people in the city for whom $300,000 is a rounding error,” and the cost is well-worth the convenience.

As a developer, on the other hand, opening a car condo could easily be seen as the best value for money.

“[To them], a car condo makes so much sense: ‘I can build this for much less per square foot then I could build an actual condo because I don’t have to build granite counter tops or marble baths,'” said Valhouli. Most car condos are either developed as stand-alone properties or are incorporated into larger residential projects.

The concept was first reported in Park Slope in 1987 when developer Howard Pronsky was selling 7.5 feet by 6.5 feet slots for between $30,000 and $34,000. “These spaces will be worth $100,000 someday, someday soon,” he told the New York Times. Last year, a car condo at 845 Union Street in Park Slope was selling for $300,000.


Related Articles

arrow_forward_ios
Compass SoCal boss Nick Segal steps down

Compass SoCal boss Nick Segal steps down

Amazon leases nearly 154 million square feet of warehouse space compared to the 4 million square feet it owns (Credit: iStock)

How Amazon became the leasing king of e-commerce

Democratic State Sen. James Skoufis (Credit: NY Senate)

Real estate agents facing subpoenas after failing to appear at hearing

From left: 1 West End Avenue, 161 West 13th Street and 66 Ninth Avenue (Credit: StreetEasy and Wikipedia)

Porter House penthouse among NYC’s 5 priciest homes to hit the market last week

15 East 90th Street (Credit: Google Maps)

Lonely townhouse finds a match after years on market

Developers are paying big for parking lots in urban areas. (Credit: iStock)

They paved paradise to sell a parking lot

From left: renderings of 1 Propect Park West, 85 Jay Street and 98 Front Street in Brooklyn (Credit: StreetEasy)

The priciest Brooklyn condo filings of 2019

60 East 93rd Street and Carlton Hobbs (Credit: Google Maps and Getty Images)

Why a $68M townhouse listing was abruptly pulled off the market

arrow_forward_ios
Loading...