Expert: Mike Fortunato - 12/15/2010

Question
Hello Mike. My question for you is with regard to purchasing a parking lot as an investment property. I live in Los Angeles, CA where parking is a necessity and is often paid for. I'd like to look into purchasing a parking lot in the downtown or Hollywood area but do not even know where to start. Can you give me suggestions on where I might look for listings on parking lots for sale? Also, what legalities do I need to consider when purchasing a parking lot? I am assuming I will need some sort of commercial liability insurance as well as a city permit? Anything else to consider? Do you think this is a good investment in your opinion? Thank-you for your thoughts.

Answer
You can start your search online at sites such as www.loopnet.com or www.costar.com.  Or, you can hire a commercial broker in the area you're interested in (simply look around for broker signs to see who is active).

I think it can be a good investment, if the lot is located in a good spot. Note that you will have expenses to consider -- insurance, taxes, maintenance, and most likely you'll have labor costs for an attendant. Yes, you will need a city permit and/or business license, but those are usually fairly affordable.