Land for business development.
Renting out parking spaces is an interesting idea, especially for those who already own land or want to buy land as a holding asset for future opportunities. You can rent out parking spaces as a temporary solution.
The reason renting out parking spaces is so attractive is the high demand for parking in many areas, particularly near densely populated and expanding communities. Many car owners lack parking spaces, making this a high demand. This also applies to land near extended BTS/MRT lines, workplaces, and commercial areas.
Even if the land is in a side street, not directly on a main road, or is otherwise unsuitable for any commercial use, it can still be utilized for parking. Therefore, if you assess your existing land and determine it's unsuitable for any commercial activity but is in an area with high demand for parking, investing in a parking rental business is a worthwhile option.
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Do I need permission to rent out parking spaces?
Generally, no permit is required. However, you will be subject to property tax for commercial purposes. While the tax is higher than for residential land, it is lower than for vacant land.
The property tax rates are as follows:
Commercial Land
• Value not exceeding 50 million baht: Tax rate 0.3%
• Value between 50-200 million baht: Tax rate 0.4%
• Value between 200-1,000 million baht: Tax rate 0.5%
• Value between 1,000-5,000 million baht: Tax rate 0.6%
• Value exceeding 5,000 million baht: Tax rate 0.7%
Vacant Land
• Value not exceeding 50 million baht: Tax rate 0.3%
• Value between 50-200 million baht: Tax rate 0.4%
• Value between 200-1,000 million baht: Tax rate 0.5%
• Value between 1,000-5,000 million baht: Tax rate 0.6%
• Value exceeding 5,000 million baht: Tax rate 0.7%
However, in the case of land or buildings left vacant or not utilized appropriately for 3 consecutive years, in the following year... 4. An additional 0.3% tax will be added, and another 0.3% will be added every 3 years, but the total tax rate will not exceed 3%.
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Land Size and Parking Space Size
When setting up a parking lot for rent, the size of the parking spaces must be considered. A suitable parking space, not too small and not too large, is approximately 12 square meters per car. If you have a land size of about 5-10 square wa (approximately 20-40 square meters), you can rent out about 2-3 parking spaces.
For a simple parking lot rental business, you may need to invest minimally. If the land is already usable and doesn't require land filling, you can simply find someone to mark the parking spaces and rent them out. You won't need to hire a caretaker, as these types of parking lots are often located near communities and are small plots that are difficult to invest in for other purposes.
If the land requires additional filling or concrete paving to facilitate parking, you need to have a contractor assess the cost of the land filling. This can be a lump sum or a per-square-meter charge, depending on the contractor.
Serious investment in a parking lot can be categorized into small and large. Small parking lots, accommodating 5-10 cars, may require a land size of at least 100 square wa (approximately 400 square meters). Large parking lots, accommodating 10-20 cars, may require 200 square wa or more, depending on the land shape.
If you need to increase parking space for additional revenue, building a multi-story parking garage is one option, but it's rarely undertaken due to its high cost and lack of return on investment. It's noticeable that those who invest in large parking lots or multi-story garages do so to support their core business, such as large shopping malls or large commercial areas with high parking demand.
For medium and large-scale parking lots, investment in a robust parking management system is crucial. This includes well-organized parking spaces, a fee collection system, and entrance/exit gates with barriers.
Security measures could include CCTV cameras for peace of mind for both landowners and parking attendants. For large parking lots, hiring security guards may be necessary, depending on the landowner's budget.
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How to Calculate Rental Rates
Consider the potential rental rates for the area. Some locations offer high revenue potential by charging hourly rates. However, some locations only offer monthly rentals, which might fetch around 1,500-3,000 baht per month per vehicle.
Assess whether it's worthwhile. Once you've estimated the potential income, budget your investment accordingly. Investing too much could mean a long time to recoup your investment, making it potentially not worthwhile in terms of time.
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Thank you for the valuable information from DD Property.
