Paula Chin in Building Operations on June 19, 2017
Savvy co-op and condo boards know how to find gold in the most prosaic places, including parking garages and decks. Boosting your bottom line by leasing some of your parking spaces to a garage operator might seem like a win/win – steady income with no shareholder backlash – but as the board at the Forest Hill co-op in Forest Hills, Queens, discovered, it can be anything but.
This 120-unit building, which has 50 parking spots in a downstairs garage reserved for shareholders, was raking in $3,000 a month from its lease with a garage operator, which was free to rent the 48 additional spaces in an upstairs outdoor deck. It sounded good on paper, but the arrangement came with an unexpected cost.
“In order to make a healthy profit, the garage company was packing cars in so tightly that it took forever for shareholders to retrieve their cars or find a parking space,” says board president Ray Ochs. “Sometimes, 50 cars had to be moved to get to someone’s car.”
The situation became so untenable that the board members started looking for an exit plan. After checking out the rates for parking in the area (the co-op is near an expressway and the Long Island Rail Road), they did the math and calculated that they could make a healthy profit of their own by renting out monthly spaces to non-residents, which would also solve the overcrowding problem. When the contract with the garage operator expired, board members took the leap and decided to manage the parking themselves.
In a business-savvy move, the co-op advertised at a $275 monthly rate for the outside spaces, “undercutting slightly what the area would bear to make our parking more attractive,” explains Ochs. The co-op also offered a reduced rate to its commercial tenants, which occupy the 12-story building’s entire first floor. As a result, after one year, almost all of the outdoor spots are rented – including four spaces to ZipCar – netting the co-op around $11,000 a month.
“There’s no question you can make a lot more money by switching to self-managed parking, especially if you’re near a commercial area like we are,” says Ochs. “The board does have to do a lot more work, and so does our management company – but it’s worth it.”
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