It is not enough to just dream of success, you should have a strategy, business plan, and zealous drive to attain it. And while that is good advice, it is also a good idea to work smarter instead of harder. Instead of starting out trying to reinvent the wheel and invent a new product that will take over the world, you may want to start a passive income business in the meantime.
So, where would you start? Everyone needs clean clothes, so perhaps you can launch a laundromat business? Everyone needs to eat, so why not open a restaurant? However, the United States is a car-loving country, so why not a parking lot? How much can you earn from a parking lot business?
How much money you earn from a parking lot business depends on where it is located. If your business is located in a population-dense urban area, then you can always count on customers.
However, you can also earn from a parking lot business based on having long-term business plans as well. (More on that later.)
If your parking lot business is located in a low-population rural area, then you won’t be able to charge as much. Parking rates in remote rural areas with one or two medium-sized cities nearby could be as low as $1 per hour.
But if you have a parking lot business in New York City, you can charge $15 per quarter-hour or $60 per hour.
So, at base average, you may be able to generate as much as $73,000 annually with a parking lot business. Keep in mind that this is just a base estimate. How much you ultimately make from a parking lot business will depend on many factors.
Let’s discuss how to launch a parking lot business.
The Business Plan
Just launching a passive income business is no guarantee of success. And every passive business involves hard work, just not the kind of required physical work that comes with a traditional job.
But most importantly, you need to have a bulletproof business plan. Here are some factors you should consider so you can earn from a parking lot business.
Location
The most important phrase in real estate is “location, location, location.”
How much money you earn from a parking lot business will be determined by your business plan.
For example, you will want to research whether there are residential housing complexes, businesses, and shopping hubs nearby before you start building a parking lot business.
However, you can also play a long-term angle when it comes to a parking lot business.
You can buy an empty lot or some real estate in an area that will see urban expansion and gentrification in a few years. Then you can strategically wait to build a parking lot or lease the operation to someone else.
Or you can even buy an abandoned building for such purposes and then tear it down later.
Make sure that you study local zoning laws, business insurance, and tax obligations before you attempt to start a parking lot business.
The local zoning laws and building codes may determine what kind of parking lot business you can operate.
Parking Lot or Parking Garage?
If you want to earn from a parking lot business, you will want to focus on what kind you want to operate.
So, should you open a parking lot or a parking garage? You need to understand how many potential consumers are in the area before starting. If you do, you can make a lot of money or lose a lot.
A multi-story parking garage offers more parking spaces and potential for profit. However, it may be a costlier investment. And if there is not a lot of parking demand nearby, you will lose money. (Remember, location, location, location!)
Building a parking lot is a lot cheaper and it is easier to maintain. However, you will limit yourself to 10, 20, 30, or 40 parking spaces, depending on the size of the lot. So, you could potentially lose out on a lot of business if there is a lot of local demand for parking.
Staffing
The type of parking lot business you own will determine what kind of staffing you will require and the expenses you will pay.
Your parking lot could have no gate or security and be based on the honor system. Your customers could pay beforehand or as they park.
However, you must assume every customer will pay. And your insurance could take a hit if cars are damaged or stolen in a non-gated parking lot with no staff.
You could hire secretarial and accounting staff, cleaning staff, valets, and security for your parking lot or garage. While doing so will augment safety, this will add to your business expenses.
Costs to Launch Business
While we have been talking about how to earn money from a parking lot business, we need to talk about the costs of launching one.
While parking lot businesses can be lucrative, it could take years to turn a profit depending on launch costs.
LoopNet is a website that lists parking lots and garages for sale throughout the United States. You could buy a parking lot in the rural Midwest for $100,000. Or you can buy a parking garage complex in New York City for $30 million.
So, your business plan should consider how much you have to spend to launch your business and how to efficiently and quickly recoup the investment.
How Much Can You Earn From a Parking Lot Business?
An average-sized parking lot business can bring in $73,000+. But you should not take that estimate as a given.
Your business plan, the type and size of your parking lot business, your staffing concerns, and how much money you invest in it will determine your rate of success.
Here is a website that will help you consider your initial start-up costs.
And don’t launch a parking lot business on your own – consider consulting a financial advisor first.
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Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.