Investing in lock up garages?

[trowelhead]

Anyone here invest in lock up garages?

I've been looking at a couple of "garage colonies" as an alternative to btl.

Returns seem good, low maintainable etc

Anyone here invest in garages? Any advice you could share?

[matty g]

No advice as such. But a mate has bought a tyre fitting business that has 12 Lock ups and they return enough to pay the mortgage.

Massive help to a new business

[98elise]

What are the returns like? I have a few BTL's and I've been looking to branch out. I have been considering an industrial unit as self storage as it looks like I could get reasonable returns, but it has its own issues (business rates, staff etc).

The self storage idea is a big leap as I'd be looking at a significant investment up front.

[gregf40]

It can be a great investment if you get a good long term tenant.

I get payment for 12 months upfront to get rid of time wasters.

I find the yields on parking spaces and garages to be far higher than residential property - and far less hassle with regards to maintenance.

[trowelhead]

98elise said:

What are the returns like? .

General rule of thumb in my area seems to be a return of 10% e.g I can buy a fully tenanted site yielding £8500 per year for 85k etc

However, if the site needs redeveloping or is vacant they can be picked up much cheaper.

For example, I was able to find a site near me that was bought vacant for 20k, replaced the ageing garages and is now being sold fully tenanted for 85k. I'm assuming it would have cost them less than 10k to redevelop the site. So the rent of 8500 gives them a 27% return on their cash. Or if it sells will be a 55k profit.

Main downside to this over btl seems to be harder to get lending on garage sites, hence why these seem to be great deals for cash buyers.

[trowelhead]

matty g said:

No advice as such. But a mate has bought a tyre fitting business that has 12 Lock ups and they return enough to pay the mortgage.

Not a bad situation to be in!

[trowelhead]

gregf40 said:

It can be a great investment if you get a good long term tenant.

I get payment for 12 months upfront to get rid of time wasters.

I find the yields on parking spaces and garages to be far higher than residential property - and far less hassle with regards to maintenance.

Interesting thanks for the input. I'm attracted to the lower maintenance and also less hassle evicting non paying tenants etc.

Do you find it a hard sell to get 12 months upfront? And do your tenants tend to be long termers?

[StangGT]

This sounds very interesting... Where do such sites tend to be advertised?

Cheers...

[trowelhead]

StangGT said:

This sounds very interesting... Where do such sites tend to be advertised?

Cheers...

Commercial property auctions usually...

[davepoth]

trowelhead said:

gregf40 said:

It can be a great investment if you get a good long term tenant.

I get payment for 12 months upfront to get rid of time wasters.

I find the yields on parking spaces and garages to be far higher than residential property - and far less hassle with regards to maintenance.

Interesting thanks for the input. I'm attracted to the lower maintenance and also less hassle evicting non paying tenants etc.

Do you find it a hard sell to get 12 months upfront? And do your tenants tend to be long termers?

12 months' upfront would only be £500 for the lockup I rent, so it's not so bad really. It might put a few people off, but the benefit is that you'll probably get better tenants that way.

[98elise]

trowelhead said:

98elise said:

What are the returns like? .

General rule of thumb in my area seems to be a return of 10% e.g I can buy a fully tenanted site yielding £8500 per year for 85k etc

However, if the site needs redeveloping or is vacant they can be picked up much cheaper.

For example, I was able to find a site near me that was bought vacant for 20k, replaced the ageing garages and is now being sold fully tenanted for 85k. I'm assuming it would have cost them less than 10k to redevelop the site. So the rent of 8500 gives them a 27% return on their cash. Or if it sells will be a 55k profit.

Main downside to this over btl seems to be harder to get lending on garage sites, hence why these seem to be great deals for cash buyers.

Thanks thats useful information.

I can get higher returns from BTL if mortgaged (leveraged) but as the mortgages get paid down the ROI drops so moving to something like lock ups/storage looks appealing.

[trowelhead]

98elise said:

Thanks thats useful information.

I can get higher returns from BTL if mortgaged (leveraged) but as the mortgages get paid down the ROI drops so moving to something like lock ups/storage looks appealing.

There are a few companies who invest in lockups on a larger scale. They can and do secure lending on garage sites (you can see details on duedil)

It seems like if you had a couple of sites unencumbered held in a ltd company, showing good cashflow etc with a couple of years full accounts then a bank at that point would lend. As you can imagine, leveraged returns on these sites would be great!

[gregf40]

davepoth said:

12 months' upfront would only be £500 for the lockup I rent, so it's not so bad really. It might put a few people off, but the benefit is that you'll probably get better tenants that way.

Exactly.

If they can't commit to that I think the potential problems down the line won't be worth the hassle.

[gregf40]

trowelhead said:

StangGT said:

This sounds very interesting... Where do such sites tend to be advertised?

Cheers...

Commercial property auctions usually...

Yes...sometimes on RightMove residential to.

Or go old school and leave notes on garages as I did back in the 90's round London. Probably the second best investment I have ever made.

[geeks]

If you fancy investing in a setup in or near MK I have at least two tenants for you

[trowelhead]

gregf40 said:

Yes...sometimes on RightMove residential to.

Or go old school and leave notes on garages as I did back in the 90's round London. Probably the second best investment I have ever made.

Ha ha! I read a story about a guy who used to park up and scope out garage sites on a Sunday morning, he would wait for a tenant to arrive then pose as a punter looking for a garage to get the contact details of the landlord - then he'd call and make them an offer!

Rightmove keyword search for lockup garages works well as does google search - loads of auction sites and listings will pop up!

[sideways sid]

I tried to acquire several sites in 2003-5 as I think lock-up garages are a great investment for the reasons given above as well as potential development profit.

There were a couple of larger specialist companies buying very keenly at the time - anything that came to market was being bought almost immediately and I couldn't compete. If the market is more conventional now I would definitely consider buying again.

[StangGT]

gregf40 said:

Yes...sometimes on RightMove residential to.

Or go old school and leave notes on garages as I did back in the 90's round London. Probably the second best investment I have ever made.

Hi Gregf40, I was intrigued by your comment 'the second best', so I clicked on your profile (hope thats OK!)

saw your link to Seedrs... something I've been looking at myself... would you care to give your views on it as an investor? Many thanks!

StangGT

[StangGT]

I've been doing a fair bit of googling for lockups in my area today (North Surrey)...

I might be looking in the wrong places but so far I havent found very much!!

Interesting article here though

http://www.ft.com/cms/s/0/ef86073e-34e4-11e3-8148-...

[gregf40]

StangGT said:

Hi Gregf40, I was intrigued by your comment 'the second best', so I clicked on your profile (hope thats OK!)

saw your link to Seedrs... something I've been looking at myself... would you care to give your views on it as an investor? Many thanks!

StangGT

Ye sure (sorry for going OT everyone else) - I think it's a fantastic platform (which I think is going to grow considerably as the whole P2P and crowdfunding scene continues to grow) - unfortunately, I missed the boat on investing in it!

There are some companies which come up seeking investment which I don't think are great - but equally, there are some fantastic ones.

Through it I have invested in Maily, Frame Again (which was on Dragon's Den), Future AdLabs, NearDesk, LandBay and a couple of others.

I have also put money in POQ and Stamplay which are currently still looking for investment.

The tax benefits are great - for a £1k investment HMRC give you £300 tax back if it is an EIS investment or £500 if it's SEIS (there is a emblem on each listing saying which it is).

You also get loss relief as well should the company go under.

I think it's a really fun way to give something back and hopefully will find the next Amazon through it

Edited by gregf40 on Friday 21st November 21:15