City car drivers must contend with ever increasing car parking charges as well as rising road tax and congestion.
There is a way you can offer help to harassed drivers and cash in at the same time - by purchasing an inner city garage or car parking space and leasing it out. Parking space is at such a premium in most UK cities that you can get superb returns from any parking site.
Recently, estate agency John D Wood sold an 11 x 19 foot garage and parking space in London's Kings Road, Chelsea, for 120,000. Let out to a car driver, the garage will generate 4,500 a year in rent. While the 3.75% yield is not high compared to property rental, capital growth is good and the owner is likely to make substantial profits when the garage is sold.
Garage prices and potential rental returns vary for different parts of the country and are highest in areas with a high density of shops and offices. In Wapping, thanks to its proximity to the City, parking spaces can be purchased for around 10,000 and let for 3,000, giving a 30% annual return.
Perhaps the highest profit might be in places which discourage city center driving. Take York, with its old fashioned narrow, winding streets. Here, annual parking rents have risen to over 1,000, producing yields of between 15% and 20%.
Hefty parking profits can be earned in smaller towns and villages too. A parking space in the Cornish fishing village of Polperro sold for 12,000 in the summer of 1997.
Buying a garage or parking space and letting it out is perhaps the simplest form of property investment there is. Maintenance is minimal - all you need is a padlock and chain. It is a shrewd investment too, as garages and parking spaces can drastically enhance the value of a city center property.
There are pitfalls to watch for. Alterations in local transport policy may see the area being pedestrianized, or access limited only to people who live there, thus wiping out any chance of renting out your garage or car parking space.