First parking buy: a small lot of my own, or four deeded spaces in a condo garage?

$60 a month per space for ten years with no change is the part I'd sit with. That's not a stable rate, that's a rate nobody has looked at. If the market there supported $85 you'd never know from the seller's numbers.

Small downtown, 19 spaces, one office tenant supplying most of the demand. What happens when that office moves? In my markets that's the whole risk in one sentence.

I like the four spaces on paper because I want income without a second job, and gravel plus snow plus a fence sounds like a second job. But four spaces spread over one garage means one building's decisions control my whole position. Are HOA dues on parking spaces usually small, or can they get ugly?

marlow, dues on a deeded parking space vary widely and they can carry special assessments the same way a residential unit can. A garage needs structural repair eventually, waterproofing, deck coating, expansion joints, and those are expensive per square foot. When that bill comes, the owner of four spaces pays a share by whatever allocation the declaration sets. Ask for the association's last two years of financials, the reserve study if one exists, and the minutes covering any discussion of deck repair.

flint, the two deals differ in what you actually control. On the lot you control the rate, the tenant mix, the surface, and the exit. On the spaces you control the rate and nothing else, and even the rate can be limited if the declaration restricts renting to non-residents. Whether an association may impose that restriction, and whether any local ordinance overrides it, turns on the documents and on state condominium law, so have a real estate attorney in that state read the declaration before you commit.

On the numbers as you gave them: 19 spaces at $60 is $13,680 gross. Take out taxes, insurance, and gravel work and the yield on $110k depends almost entirely on whether $60 is the market rate. Four spaces at $185 is $8,880 gross on $88k, less dues, and that's a thinner spread than it looks once dues run $40 to $70 a space in some buildings.

The assumption doing the most work in your comparison is the durability of your single office tenant on the lot. Price that risk before you compare yields.

Deeded turned out to mean something specific here. So the space has its own legal description and tax bill, and it's real property I own, versus just having a right to use a space assigned by the building? Reading that twice.

juniper, roughly yes, though how it's created and recorded varies by state and by the building's declaration. flint, my bias is obvious: the lot is land, the spaces are not. In twenty years the lot can be something else. The four spaces will still be four spaces in somebody else's garage.

What's the zoning on the 19-space lot, and what's it worth if it never parks another car? That's the number I'd want before I compared income at all. If the dirt alone is worth $110k, the parking is a bonus and the office tenant risk stops mattering as much.

How do you even screen a monthly parking tenant? With a rental I have a process. Do you run anyone, or do you just take the money and cancel the pass if they stop paying?

wren, mostly the second. The pass or the plate stops working and the enforcement is a tow, which is its own headache and regulated differently depending on where you are. flint, on the gravel: it isn't zero maintenance. Regrading and adding stone runs real money and potholes in gravel become drainage problems fast. I'd rather buy asphalt with five years left than gravel with a soft base.

Dumb question I'd have been shy about elsewhere. If flint buys four spaces in a garage, who plows or sweeps them, and who's liable if someone slips walking to their car? I assume the association, but does owning the space change that?

compass, common area upkeep usually sits with the association, and premises liability allocation depends on the declaration and on state law, so that's a read-the-documents answer. flint, I'd add one thing on the lot: check whether the office tenant's employees park there under a written agreement or a handshake. I've seen ten years of handshake evaporate in a month.

Four spaces, one wire transfer a month, no snow. That's the version I'd pick. I'm aware I'm answering my own temperament and not flint's.

There's a third option nobody voted for yet. Buy the lot and hire a small local operator to handle collections and enforcement for a fee, so flint gets the land without learning the tow business in year one. It costs some of the yield. At 19 spaces the fee may eat too much of it, which is fair.

flint, my list has three lots on it and the thing I've learned building it is that the seller's rent roll on small parking is almost always stale. Two of the three were under market by more than 25% once I called around and asked what a monthly pass costs nearby. Do that calling before you pick between these two, because it might make the lot the obvious answer or kill it entirely.