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Investing in garages: recommendations and market trends

One of the most frustrating experiences faced by those who live or work in large cities is finding a parking space for their vehicle. In cities such as Madrid or Barcelona, ​​there is practically no alternative to using a public car park and even this does not guarantee the availability of parking spaces during the day. This situation has led many investors to take an interest in garages. These are eminently practical properties (for parking the vehicle in) that can become an excellent investment, as confirmed by the latest statistics in this regard. 

The margin of profitability for garages is placed above other real estate properties, although the greater interest on the part of the investors has slightly increased in terms of these intangible assets. Even so, whoever buys a garage today can expect capital gains of close to 10% over a decade. It is, in any case, a conservative forecast, since some analysts still draw potential returns of more than 20% in ten years. 

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Logically, one of the most determining factors to establish the profitability of investing in a garage is its location. The centre of the big cities is the true golden mile for this type of business, since it is where there is a greater demand. Of course, we must take into account the latest actions from the main Spanish city councils in terms of traffic management. Madrid or Barcelona have approved severe traffic restriction plans at specific times, but also have plans to increase pedestrian zones. 

This tendency forces us to consider the districts or neighbourhoods that are not exactly close to the centre of the cities, despite the fact that parking spaces must be located a short distance from the centre. 
This also facilitates the maneuverability of potential parking users, since driving through the main urban routes is always complicated. Linked to the above, the investor must bear in mind that the price of garages close to the centre of the city will be considerably more. It is true that there is still a significant number of real estate stock available in some cities at lower prices, but these garages have a lack of interest for future tenants. 

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However, just because the purchase price is higher in some cities it does not mean that the garage can't be rented out quickly. Both garages and storage rooms (another type of property on the rise) can easily be maintained without the need for costly periodic checks and repairs. The maintenance expenses are low as this type of property does not deteriorate as much as other assets do. Another factor that affects profitability is the rental contract chosen for the garage. Generally, the owner opts for monthly, quarterly or annual rental payments, although it is also possible to rent the garage for a few hours (only recommended in highly sought after locations). 

Among the legal issues, it is necessary to verify whether the garage you want to buy is listed in the relevant Land Registry, otherwise the investor could be faced with unpleasant surprises afterwards. An additional advantage is that these types of rentals are not regulated by the Urban Leasing Law but by the Civil Code, and can be somewhat more flexible.

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