With reports noting that personal vehicles are rapidly increasing in most of our urban cities, buying a parking lot to start a parking lot business can seem like a viable enterprise.
These businesses are known to possess a low entry point with substantial yield. Parking lots are situated in locations with limited street parking but with a lot of automobile traffic. Parking services may be provided in exterior open lots or in interior secured garages.
Parking lots businesses are meant to be in commercial areas, close to airports, near hospitals, adjacent to schools, and near event spaces that draw in huge crowds.
Although you can also lease space but don’t forget that the lot you purchase will determine the type of parking services you would provide. Search for empty lots you can convert into a parking lot, or find a lot that’s all prepared for clients to leverage its services.
Look for a lot in high-traffic areas, including near tourist attractions, restaurants, malls, sports arenas, conference centers, hotels, airports, and cruise ship lines.
It is also necessary you take into consideration the zoning laws of your location and ensure you grasp the lot’s construction limitations prior to purchasing it. Prior to buying an undeveloped lot, ensure to find out how many parking spaces you can fit on the property.
According to experts, parking spaces open to the public tend to measure around 9 to 10 feet in width by 18 to 19 feet in length, with extra spaces kept for larger handicapped vehicles.
You have to stripe the lot, paint the curbs, and design arrows to show the driver’s points to enter and exit. The expense associated with this work, especially for a lot with 100 spaces can be over $800. Materials and labor will differ depending on your state.
Steps to Buy Parking Lots for Your Parking Lot Business
-
Conduct Market Research and Feasibility Study
This is the very first step to take to ensure you make the right decision and guarantee success for your business. You will want to look into the areas you are interested in.
Look for a lot in high-traffic areas. It is also necessary you take into consideration the zoning laws of your location and ensure you grasp the lot’s construction limitations. This study will aid you in the evaluation of your location and how well your business will survive there.
-
Set a Budget
All fingers are not equal and in business, it is important you understand your capabilities and limitations. You will also what to understand the capital you have and the proportion you would want to invest in buying your parking lot. Most often, this will take up a better proportion of your starting capital.
You should also consider other essential things like refurbishment, technology, upgrade, additional facilities, and business marketing. You would want to know how much you have and how much will be remaining to tend to other business needs.
-
Find Suitable Properties
This is without doubt where the real work starts. You won’t find an empty parking lot lying around waiting for you to find it and refurbish it.
There are many ways to locate suitable properties and it is important you invest as much time as possible to ensure you find one that is right. Consider leveraging online listings, real estate agents, or other resources to locate properties that are ideal for the business you intend to start.
You can also find spaces that are convertible into a parking lot. Take into account variables like location, size, accessibility, and existing infrastructure.
-
Evaluate Zoning and Permits
Never underestimate the importance of zoning laws and other necessary authorizations in this line of business. It is particularly essential to take into consideration the zoning laws of your location and ensure you grasp the lot’s construction limitations prior to purchasing it.
Numerous States have restrictions on where you can start a commercial business like a parking lot, and this will most often vary from place to place. Ask about any necessary authorization or licenses required to operate a parking lot.
-
Physical Inspection
Once you have found properties you feel are ideal for this business, it is necessary that you physically inspect them. No two businesses are ever the same and by now you already have a firm understanding of the services you intend to offer your clients and the sort of lot you need.
Owing to that, it is recommended you make out time to visit the properties to physically inspect them personally. Take your time to analyze and evaluate the condition of the lot, the layout, and any existing structures. Also, peruse for potential problems that may necessitate repairs or maintenance.
-
Financial Due Diligence
Since you will be purchasing an existing parking lot, this is a very important phase of the buying process. Due diligence is more or less the process of extensively inspecting every aspect of a parking lot, seller, financing, leases, rent roll, easements, and more prior to purchasing it.
Take your time to evaluate the financial records of the property, such as any income generated from the parking lot if it’s already operational. Check for expenses, revenues, and potential profits to ensure you make a very valid decision.
-
Negotiate the Purchase
This is one of the most critical aspects of making your purchase. Once you find the ideal property for your parking lot business, you will want to negotiate the purchase price with the seller. This is where your budget comes into place. You should also be ready to counter-offer and take into account factors such as the property’s condition, market conditions, and budget.
-
Secure Financing
Unless you possess the cash to make this purchase, have it in mind that you may need some kind of finance facility to fund your parking lot purchase.
There is a wide range of options available when it comes to financing; however, the option you choose will depend on your personal circumstance and how you intend to pay back. Nevertheless, It’s important to note that not all real estate investment financing options are created equal
-
Complete Legal Documentation
Once you have found the ideal parking lot to purchase, you have to seal the deal and go ahead with starting your business. It is recommended you reach out to or work with a real estate attorney to take care of all legal documentation, such as the purchase agreement and title transfer. You will also what to verify that everything is in order to protect your interests.
-
Renovate and Set Up
Just as was noted above, the expense associated with opening a parking lot business will vary but will most likely depend on the price of the property you buy and how much work is necessary to get it ready for your intended clients.
Howbeit, once you are done with finalizing the legal documents, there might be a need to carry out refurbishments or improvements to ensure that your property is functional and attractive for customers. Don’t forget the importance of adequate signage, lighting, and other amenities.
Also, remember to market and promote your parking lot business to draw in clients. Leverage online platforms, local advertisements, and word-of-mouth.
Conclusion
In this line of business, location is, without a doubt, the most vital factor to ensure that you can attain business success. It is pertinent you take time to find a location with steady heavy traffic. Parking lots are situated in locations with limited street parking but with a lot of automobile traffic.
Parking services may be provided in exterior open lots or in interior secured garages. Parking lots businesses are meant to be in commercial areas, close to airports, near hospitals, adjacent to schools, and near event spaces that draw in huge crowds.