This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.
Q. I own a two-bedroom, two-bathroom condo in Clarendon that I rent out. The unit only has a single parking space. Does it make sense to purchase a second parking space if I find one for sale?
A. If you were living in the condo and personally needed a second parking space then the decision making would be a little different. You would need to factor in how much it costs you each month not to own a parking space for your second car. You would also likely consider how much the convenience would be worth to you.
Because you are renting the property out, you need to look at it as an investment. In Clarendon, condo parking spaces typically sell for $15,000 to $25,000. Your agent should be able to help you figure out what the market rate is in your building. If you don’t have an agent relationship, then check the Arlington County tax records. Although I would not count on seeing much appreciation from a parking space, you may be able to find a situation where you can purchase it for below market value and later sell it at or above market value.
The next step is to determine how much extra the parking space will be able to help you earn each month with your rental. Compare this to how much your money could be making you if you invested it elsewhere. For example, if it is returning an average of $100 per month in a current investment, but you could be earning an extra $200 per month in rental income with two parking spaces, then it would make good sense to purchase the second parking space.
Some two-bedroom condo owners fear that they will have trouble selling their homes without a second parking space. That is not the case along the Ballston to Rosslyn corridor. Seventy-one percent of the two-bedroom condos sold along the R-B corridor in the last 12 months did not have a second garage space and their average days on market were only 25. The days on market actually increased for two-bedroom condos with a second parking space. That’s probably because of the higher price point for those units.
Note: Before making a final decision on your purchase, check with the condominium association to be sure you are aware of any rules and fees that may affect your ownership of a second parking space.
The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.
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