Question 1

What's a reasonable cap rate for parking lot investment?

Accepted Answer

Typical range 12–25% depending on location and market. Below 12% suggests oversupply. Above 25% indicates exceptional location or acquisition discount.

Question 2

How much equity should I put down?

Accepted Answer

Standard 25% equity, 75% loan (75% LTV). Higher equity reduces leverage but also reduces return. Lower equity increases return but increases risk.

Question 3

What's the biggest risk in parking lot investment?

Accepted Answer

Demand risk (occupancy decline). Interest rate and operational expense risks are secondary. Autonomous vehicles present long-term demand uncertainty.

Question 4

Should I expect revenue growth over time?

Accepted Answer

Parking rates historically inflate with CPI (2–3%/year). Assume conservative 2–3% annual revenue growth.

Question 5

How long should I hold a parking lot investment?

Accepted Answer

10–15 years optimal. Shorter holds may not realize full appreciation. Longer holds expose to autonomous vehicle risk.

Parking Lot ROI Calculator: Investment Analysis & Financial Projections