Does anyone have any experience purchasing (outright) a carpark space as a commercial rental investment via their SMSF? Depending on the state or territory, these (13 m2 size) go for anything between $25-55k. It is usually strata titled, and the owner is up for council rates, management fees and other outgoings. Rents are about $100-200 per calendar month depending on location. The intent is to have a regular income stream (before anyone starts up about it lacking the capacity for capital growth ie you can't paint or renovate to increase its value). It could be argued that socking it in high interest bank accounts will give similar or better return and liquidity. But I get to park in the CBD in my own spot! :lol: if I choose not to lease it out. Fire away, folks.
I have one in Sydney CBD. But not through a SMSF. There isn't much to know - pretty straight forward, leased and been cashflow +ve since day 1. BTW, a 14m2 concrete slab is very low maint. I can give you a couple of things to think about if buying in Sydney.
I have a friend who got each of his teenage sons to buy one car space each in the Sydney CBD back in the 90's for about 5K each. Clever guy. I have another friend who used SMSF to buy a large unit in a strata self-storage place in Alexandria, he is making a good return on that one.
Only if you wanted to be deemed a non-compliant fund and cop a fine equal to 46.5% of the fund ASSETS (not earnings).
Yes its section 62 that really gets the auditors nickers in a knott http://law.ato.gov.au/atolaw/view.htm?Docid=DSF/SMSFR2007D1/NAT/ATO/00001&PiT=99991231235958 Of course if you were parking your business car there during the day and were paying the arms length commercial rate for the priviledge and not using it for private or personal use then that would be OK Kind Regards non recourse
Bargain. Did you mean week or month? Brisbane CBD carpark spaces go for north of $800/month (Waterfront Place or Riverside).
http://www.findacarpark.com.au http://www.realcommercial.com.au (You need to trawl through a fair few listed commercial properties ie office space but there are a couple of carpark spaces for sale on the site).
On http://www.findacarpark.com.au, there was one listed in Adelaide CBD with gross income of $193 per month (based the agent/contact FAQ) for a $32k o.n.o space. Different ball game in Sydney and Brisbane!
Here are a few in Sydney. You have to trawl a bit to find them (searches under 100K often bring them to the surface): http://www.realestate.com.au/property-studio-nsw-pyrmont-106720075 http://www.realestate.com.au/property-apartment-nsw-pyrmont-109588901 http://www.realestate.com.au/property-residential+land-nsw-rushcutters+bay-200292659
I am not sure if investments in car park is the best thing to do especially with cash. I think the return is around 6-7% nett. You can get that kind of a return with a term deposit. Also, I believe the capital growth on car parks is lower.If you decide to borrow to buy, the LVR is usually low (65-70%, I believe).Because they are managed by companies like Kings Parking, Wilson Parking, etc, there is nothing you can do to add value. You have to wait for the market to move to get any appreciation. lease option homes wilmington nc
You will have the advantage that if your spot is deep enough within the building, and you have 24/7 access as the owner. You can drive your car in before the bomb drops, and bunker in for the first two weeks.
You are correct, but this is a very simplistic view of the net returns. It depends a lot on your situation, but the potential on-flow of tax advantages can result in a much higher net return than you have quoted.
Alot of my clients are and have been investing in car parks. They were much cheaper years ago, so safe to say yields have decreased over the 10-15 years however, if held they appreciate in value. I have 3 clients buying big in this: (I have no interest in this car park), getting alot of press at the moment too. Will be fully subscribed for sure. As for an SMSF, it really depends on your personal circumstance, i.e. if you are conservative and want to diversify with a smaller investment by all means go for it, however need to consider if rental guarantee, strata levy and council rates in your purchase consideration. http://www.stratacarparks.com/facts/ Address: 1008 Botany Road, Mascot NSW 2000 Location: Adjacent to Sydney Airport Property Description: Single and Double Tandem tenanted car spaces Title: Freehold Strata Price: Single - $57,500 ; Double Tandem - $104,500 Spaces: Single ? 154 ; Double Tandem ? 450 Yield: 6.5% net return Tenant: Park & Fly Pty Limited Gross Lease: 5 years with 3 x 5 year lease extension options Rent Increases: 3% increase each year except on the exercise of option when the increase will be 4% Sales Process: Private Treaty
