As the number of personal vehicles increases in cities, it’s becoming more common for people to buy a parking lot for their business. A parking lot business can be profitable with a low entry point and a high yield. In this guide, we’ll talk about the various steps you should take to ensure success in this venture.
Before you start working on a parking lot business, we’ll give you a comprehensive overview of its various aspects. We’ll also help you make informed decisions and avoid common obstacles.
What To Consider Before Buying
The Location
One of the most critical factors you should consider when investing in a parking lot business is its profitability. Before you start working on a facility, you must know the daily traffic volume in the area and its proximity to other businesses. Understanding the area’s zoning and how much it will cost to develop the parking lot will allow you to make informed decisions.
If the lot you’re considering has good traffic potential, you’ll need to choose the kind of parking facility you want to build.
Kind of Lot
Your choice of lot will also affect the type of parking facility you want to operate. Before buying a property, make sure you understand the building limitations of the lot.
Garage
Although parking facilities can offer higher profit margins and more space, they require a significant investment. Building a parking facility involves a lot of management and construction.
Traditional
Although a traditional parking lot is more cost-effective than a garage, it won’t be able to accommodate as many cars. If the area is in a high-traffic zone, you might not be able to get the most out of the facility.
Business Costs
Several expenses are involved in running a parking lot business, such as staffing, security, pavement, and monetization.
Construction
Before you buy a property, you should also consider the construction projects that will need to be completed to prepare the parking lot for its customers.
If you’re planning on building a parking garage, you’ll need a construction plan. Acquiring the necessary permits will be required to demolish an old building.
You will need to asphalt on the parking lot’s surface once it’s ready. Before you start working on the project, you need to get the necessary permits. You should also create a construction plan that includes the proper drainage and exits.
Start the permitting process as soon as possible, as it can take a long time to get approval. Paving a parking lot is typically around a dollar for every square foot.
Staff
There are many staff requirements in parking lots. The cashier, for example, is the person who collects the money that the customers pay for their cars. A security guard is needed to ensure the safety of the customers and their vehicles. A valet is also a possibility depending on the size of the facility.
Besides having a security guard, you’ll also need to install security cameras in the parking lot. These measures will help deter thieves and criminals.
Monetization
No Gate
A no-gate system is commonly used in parking facilities. This method requires customers to deposit their money on their behalf. However, it’s also the most unreliable method because it does not involve a security guard.
Gate and Cashier
A cashier is required in this type of system to process the money and resolve any issues that the customers might have. Although it’s slower and less convenient than an electronic system, it can still provide a good customer service experience.
Electronic Gate
An electronic gate is also more efficient since it can be equipped with an automatic payment system. Although installation costs can be higher, this system can be profitable.
Before choosing a system, make sure it’s the most cost-effective option for your facility. In addition to the money you spend on the equipment, you should also consider other expenses, such as taxes and staffing.
Before investing in a parking lot, you must know what other facilities charge. This will allow you to determine if investing is a good idea.
Even if the costs of running a parking lot are high, it’s still a good idea to consider investing in it if the property will eventually become profitable.