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Do you want to know why public parking lots are a great business opportunity?

Written by Contributor, on 17th Feb 2021. Posted in General

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The accelerated growth of the metropolises and with them the increase in vehicular traffic have given rise to a phenomenon that is a problem for some (such as municipalities and traffic police) and a huge business opportunity for others (entrepreneurs).

And there is no city in our country that escapes the congestion of urban spaces and therefore does not have a growing demand for public parking, especially in executive areas, airports and commercial areas to mention just a few.

If we add to this the issue of street safety, then we will understand why parking lots are such a profitable business. Until some time ago, in some cities the issue of parking lots was handled in a somewhat informal way, in the sense that they were improvised solutions to the problem.

Nowadays, the story is different since public parking lots require certain logistics, efficient administration and even technology implementation.

Some companies that are dedicated to this business in fact began with the objective of taking advantage of their own land that for one reason or another remained unoccupied, discovering along the way that it can represent a huge business opportunity. And it is not for less, because if we analyze it carefully, the business of public parking has interesting advantages:

-  Very few personnel are required, practically one manager per shift who is the same person who makes the collections.

- Minimal operational infrastructure is required

- The costs for services are minimal (some electricity and water)

- Depreciation is usually minimal too

If we had to think about the most difficult thing to set up a public parking business, surely we have to summarize it in the areas that require the most investment:

- Suitability of the land

- Electronic control system (gate machines)

- Surveillance and security systems (as an added value)

Investment that will certainly return based on two key factors: the location of the parking lot and its particular operating characteristics. To have a reference data, it could be estimated that the investment to set up and adapt a parking lot in an urban area where land prices are intermediate could reach US $ 12,000 for an area of ​​about 500 square meters.

Public Parking: Buy or Rent?

Without a doubt, taking advantage of your own land would always be a good option, however, this is not the case for all entrepreneurs. So before thinking about investing in acquiring a new land, which would trigger investment and lengthen the term for the return on investment, it is convenient to consider their income and ensure contracts of 2 to 5 years that allow recovery and prompt obtaining of good profits.

Fees

The fees deepend entirely on the rent of the land, infrastructure, security levels and schedules. The great secret lies in achieving a competitive rate that allows the spaces to be occupied most of the time. For this, as in any business, it is recommended to always do a market study and above all to analyze close competition, before going further; preparing a parking spot, buying car park barriers, placing car park machines, and so on.

Other Income Sources

In addition to the basic concept of charging for parking spaces or parking lots, other income can also be added to the business:

- Rental of advertising space inside it

- Valet parking

- Vehicle washing service

- Parking per night (ideal for residents)

- Parking per month (ideal for executives who use the service day to day).

Remember that part of the secret to the success of this business consists in the implementation of controls that allow you to manage the accounts safely and not deposit this responsibility at the discretion of a manager.

 

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