November 25, 2021
It's no secret that there is a huge problem with parking in Kyiv. This applies not only to the downtown, but also often even dormitory districts. The lack of places for cars runs to the absurd when a tenant of one house has to park his car a few blocks away next to another house and take it daily using metro or other public transport.
The deplorable situation with parking in Kyiv arose for a trivial reason: when the city was actively built up, the cars were tens and hundreds of times fewer. Consequently, many streets and houses were designed without taking into account the fact that almost every family would have a car one day, and in many families there would be even more than one car.
A possible way out of this situation is to buy a parking slot for yourself. But not all Kievites are sure that the purchase is really worth it. Let's try to find out.
What a parking slot may be required for?
It would seem that the answer to this question is obvious. However, that’s not quite the case here. In fact, you can buy a parking slot for two reasons:
- For your own use. In this case, the best option is to buy a place near your house. It is convenient from all angles. Firstly, the car will always be in sight. Secondly, you do not have to travel long distances from home to your car and back. Thirdly, most of the yards of new buildings are fenced and well guarded, which means that outsiders are unlikely to enter the house territory.
- As a profitable investment. It often happens so that future residents of new buildings not only buy an apartment at the excavation stage, but also manage to acquire several parking slots at once. They use one or two places themselves, and the rest can be rented out to other residents of the house who bought an apartment a little later. If apartments in a building are in demand, this is a really profitable investment of money, in particular, when it comes to premium and business class houses.
The cost of parking slots can vary widely. For example, in the elite Pecherskyi district, where, perhaps, the situation with parking is the worst, the cost of a parking for 15-20 square meters can reach $ 60,000. This is a huge amount and that money could be spent for good apartments in the dormitory districts of Kyiv. Speaking of the central districts of the city, the cheapest parking space can be found in Holosiivskyi district. But even it will cost at least $ 20-25,000. The average price for a parking space in the city is about $ 40,000.
Is it worth buying a parking space in Kyiv?
In fact, this is not the question for people of Kyiv, who have the financial ability to invest in parking, because it’s obviously profitable. If you have money and a suitable place, you should definitely invest. However, unfortunately, not all new buildings in the city can find a place for your car.
If the tenant did not take care of this in time, they may be just left with no parking. At the same time, difficulties may arise even with renting a suitable place. Most often this is due to the fact that many developers are building houses, planning 1.5 parking spaces per apartment. At the same time, one family may have three or even four cars that have to be parked somewhere. Consequently, there won’t be enough parking spaces for everyone. But speaking of the new houses that have been built or are being built by RIEL, Real Estate Corporation, they usually have enough parking slots for all residents. And now we have a promotion “Own parking by instalments up to 5 years”.
If there is an opportunity to invest in such a situation, do it without fail. A huge plus is that when all the parking spaces are sold out and there are the house residents who were left without a place, you can set almost any rent for one place. Many residents would just have no choice but to accept such an offer. Speaking of economy-class houses, the situation is not much different here. Today, the demand for parking slots is but huge, because there are more and more cars in the city, and less and less free space. Accordingly, there will be no problems with finding tenants.
Payback period
The payback period for such an investment depends on many factors: the area, the type of house, the number of parkings nearby, if the territory is protected or not, the number of square meters, etc.
Let's calculate the payback period based on the average value. If you buy a $ 40,000 parking space in downtown, you can rent it out for about $ 200 a month. The income is be 6% per year. That is, it is possible to earn $ 2,400 per year. The payback period is 17 years. With this, we even do not take into account the increasing demand for parkings and the rise in prices for their rental.
Considering the payback period and reliability of such an investment in parking spaces, it is no worse than investments in real estate.
