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How to make money from land ownership?

When it is necessary to consider how to utilize the land after the dismantling, what is the basis for choosing what is important? I think some people are profit margins, ease of management, low risk, and low initial costs. I think what you think in the main, what kind of utilization to use is different depending on the person, but there are merit and demerit along with no matter what you do. This time, I would like to comment on the advantages, disadvantages, and risks of “parking lot management,” which is particularly common in land use. You can make a parking lot and make money easily. For this purpose you can content to different driveway paving companies for the estimate of paving the parking lot. There are different paving options like gravel paving, concrete paving, asphalt paving, etc.  

Table of contents

  1. Main land utilization after dismantling
  2. Monthly parking lot? Is it coin parking?
  3. Advantages and disadvantages of parking lot management
  4. Parking lot management is important for consultation with experts

Main land utilization after dismantling

Let’s first look at what kind of land use there is after dismantling.

  • Rental management such as apartment, detached house
  • Rental combined housing
  • Business rental
  • Parking lot management
  • Trunk room management
  • Installation of solar power
  • Land for sale
  • Sold
  • Self-use

There are various ways to use depending on other ideas, but typical ones are like this.

Let’s take a closer look at parking lot management among them.

Monthly parking lot? Is it coin parking?

If you want to run a parking lot, you need to decide first whether you want to use “Monthly Parking (Lease)”, “Coin Parking (Time Rental)”, or both.

Monthly parking lot

The rent (parking fee) is collected monthly from the contractor. There is also a method that does not require the most initial cost of putting a rope on land and reorganizing it. However, when large stones are rolling or weeds are abundant, there is no need for borrowers, so it is actually necessary to clean up the ground and asphalt pavement.

As long as the contractor is there, the income will be stable as it is guaranteed, but without the contractor, the income cannot be expected at all, so it is necessary to conduct research on the periphery. In addition, there are a pattern of asking a contractor to manage contractors’ recruitment, rent, etc. as a method of operation, and a pattern of lending a parking lot to a contractor. In any case, the land owner pays the initial cost such as land preparation.

Coin parking

Anyone can use it freely, and a parking fee will be charged according to their usage time.

There are many in commercial areas and their neighborhoods, or areas where there is a lot of traffic and there is little parking in the surrounding area, and if it rotates well, you may be able to earn more than monthly parking. However, due to the expense of equipment such as checkout machines, lock boards, storage bars and surveillance cameras, it is essential to have some initial costs and prior peripheral research as with monthly parking lots.

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Operation methods include a pattern in which the land itself is leased to a coin parking operator, and a pattern in which the land owner prepares all the facilities, etc. and consigns only management and operation to the supplier.

Advantages and disadvantages of parking lot management

Next, I will list the advantages and disadvantages of parking lot management.

Merits of parking lot management

First of all, I will explain the merits while intertwining the comparison with other land utilization methods.

1: There is less initial investment

There are cases where you can start by just lightening the ground and putting a rope as in the previous monthly parking lot, or even coin parking (depending on the size), but if you want to use a flat parking lot with a checkout machine Even if the lock system etc. are aligned, it can start from about 9300 $ to 18000 $.

If you want a three-dimensional parking lot, you will need a solid building and facilities, but still the initial investment is much less than the cost of building an apartment or apartment.

In other words, it also leads to the merit that “If damage should occur, the damage is small.”

2: Easy to divert

For example, if you run an apartment and you need to demolish the land, you will be asking the tenants to evict you. However, it is a reality that the renter is protected by the Landlord Law and it is difficult to seek eviction unless there are good reasons. However, because the “Loan Land Rental House Law” does not apply to parking lots, it is possible for contractors to be evicted by giving advance notice (Of course there may be cases where unreasonable eviction reasons etc are not recognized).

In other words, in anticipation of another land utilization method in the future, it can be said that it is easy to once return to a parking lot and divert it to an apartment or apartment management etc. In the case of coin parking, if you make a “multi-browsing contract in multiple years” with the management and operation company, depending on the contents of the contract, there are cases in which penalties and dismantling and removal costs may occur.

3: Regardless of location conditions

For example, when renting out as an apartment or apartment management or business rental, there is a high probability of failure in a land where transportation is inconvenient, such as when it is far from the station or bus stop. However, in the case of a parking lot, the distance to the station or bus stop is almost irrelevant.

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Even in a residential area that is not close to a commercial facility, attracting customers can of course be expected if there is no space to put a car at home and no parking lot around. Because it is not subject to restrictions such as restricted areas, it can be used on residential lands unless it is very large. Parking can be said to be a method of land utilization anywhere.

4: Can start sales in a short time

Apartments, apartment buildings, business rentals, etc. may take months from planning to building, recruitment of tenants, etc. and may take more than a year in some cases.

In that respect, there are many cases where parking can be started within two weeks at the shortest.

5: Management is not complicated

Once you set up the facilities and start operating, there is no need for troubles such as breakdowns, large-scale renovation work like an apartment or apartment, or cleaning or remodeling when leaving a person.

6: It will also be a measure of inheritance tax

Because parking lots and land areas are easy to cash out, even if there are multiple heirs, for example, it is possible to cope with payment of inheritance tax smoothly. In addition, if the area is up to 200 square meters in an asphalt or concrete paved parking lot, the inheritance tax will be reduced by 50%.

7: Risk at the time of disaster, risk by aging is small

If you just lend land, there is almost no impact from aging. Maintenance of fences, paved areas and equipment is at best. In addition, there are also cases where parking lots without flat buildings can be emergency evacuation destinations in the event of a disaster, and damage received by earthquakes, typhoons, and other natural disasters will be extremely small compared to apartment and apartment management etc.

Disadvantages of parking lot management

Next, I will explain the disadvantages.

1 I cannot expect big profits

Basically, parking lot management is said to be “low risk low return”.  As the initial investment amount is small, it means that you cannot expect big returns. In addition, depending on the size of the parking lot, management costs throughout the year, repair costs due to damage, pollution, aging, etc., or property tax will come as expenses. If you choose a loan to pay for construction costs, the repayment will be deducted from your income.

2: Most tax incentives are not available

Unlike apartments, it does not become a “residential site”, so there are no tax relief measures such as “fixed property tax is 1/6” and “city planning tax is 1/3″(may be different in different countries of areas)

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3: The income tax burden is large

In the case of flat parking lot, there is no depreciation expense. Even in the case of multi-story parking lots, there is less depreciation compared to “buildings”.  Because there is little “needed cost without spending”, the portion to which income tax is levied will be larger accordingly.

4: Be particularly careful when using a three-dimensional parking lot

As the self-propelled parking lot and multistage parking lot are treated as “buildings”, the Building Standard Law is applied. There is a possibility that the installation in the residential area may not be approved by the “restricted area”, so it is necessary to know in advance.

5: Possibility of reducing the number of users

It is expected that the number of people driving cars will decrease due to the declining birthrate and aging population, the decrease in population and so on.

In addition, demand for car sharing and rental cars is also growing in urban areas, and is expected to increase in the future. If this happens, the demand for monthly parking and coin parking will likely decrease. What do you think? Parking lot management has such advantages and disadvantages.

Also, I would like to introduce some of the items that I would like to regard as “risk” rather than the disadvantages.

  • Non-payment of rent (Monthly parking lot)
  • Dead of borrowers (Monthly parking lot)
  • Parking mass is gone
  • A contact accident occurred due to the influence of narrowness (Monthly parking lot Coin parking)
  • Poor prospect of entrance An accident occurred without improving even though I knew that (Monthly parking lot / Coin parking)
  • Lock board and I / O gate etc. were broken and an error occurred in the bill amount and caused damage (Coin parking)
  • Facility Are damaged (Monthly parking lot · Coin parking)
  • On the car roughening occurs (Monthly parking lot · Coin parking)
  • Damage due to unauthorized parking or illegal parking etc (Monthly parking lot · Coin parking)
  • In the settlement machine Theft of sales money (coin parking)

Many accidents and problems are expected in this way. People who rent monthly parking lots are often in the neighborhood, so there are difficulties that cannot be said strongly even with rent arrears. In addition, it leads to “5” of the demerit, but it is necessary to grasp as a risk that the borrower is not always found. In coin parking, in particular, breakdowns such as checkout machines, storage bars, lock plates, etc. require urgent action. It is necessary to take measures such as outsourcing to a company that manages and operates on a 24-hour basis.

Consultation to expert is important for parking lot management

This time, I have introduced the advantages and disadvantages of parking lot management, which is particularly frequent as land use after dismantling.

Although it is relatively easy to manage even a beginner even among many land use, it is also possible to run a beginner, but it causes unexpected failure if you do not carefully carry out prior research in advance or carefully grasp disadvantages (risks).

It is fortunate if it is helpful for those who are currently confused about land utilization and those who cannot decide on future land utilization.

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