HOW TO INCREASE VALUE OF YOUR MULTIFAMILY - 2 OF 10
#2 - RESERVED PARKING SPACE
How Reserved Parking Spaces Increase Multifamily Revenue (and How to Do It Right)
In multifamily investing, even the parking lot holds hidden value. One of the easiest and most cost-effective ways to boost your Net Operating Income (NOI) is by offering reserved parking spaces. This strategy taps into tenants’ desire for convenience while directly increasing cash flow and property value through forced appreciation.
Why Reserved Parking Works
In areas with limited parking, tenants are often willing to pay a premium for the certainty of a dedicated spot. Reserved spaces near entrances, covered areas, or garages can command $25–$75 per month depending on the market. Just 10 spaces rented at $50 each generates $6,000 annually. At a 6% cap rate, that adds $100,000 in value—all without adding units or major renovations.
You can also create pricing tiers with carports or EV charging to increase income per unit and appeal to a wider range of tenant needs.
How to Implement It
- Audit Your Parking Layout – Identify which spots offer the most value and how many can be reserved without affecting general tenant access.
- Ensure Compliance – Check city zoning or HOA rules about monetized parking.
- Mark and Sign – Stripe, number, and clearly mark each reserved space.
- Roll Out Strategically – Offer during lease signing or renewal as an optional upgrade.
- Enforce Fairly – Use decals and partner with a towing company to maintain credibility.
- Adjust Based on Demand – Start small, evaluate, and expand if interest is strong.
💰 Cost vs. Return (10 reserved parking)
- Low-end (DIY/basic signs): ~$600–$800
- Mid-range (contracted striping + signage): ~$1,200–$1,800
- High-end (premium signage, enforcement setup): ~$2,000–$3,000+
ROI: If each spot rents for $50/month, that’s $6,000/year in extra income. Even at $3,000 setup cost, you break even in 6 months, and then pure profit, with property value goes up $100,000 = 33X of Costs.
Reserved parking is a low-cost, high-return upgrade that boosts revenue and tenant satisfaction.
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