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?

[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?

[trowelhead]

StangGT said:

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

Cheers...

Commercial property auctions usually...

[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!

[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!