Investing in a garage box as a rental property may seem like an unusual choice, but it can be surprisingly profitable—especially if you choose to rent it out.
This article explores what makes this specific type of real estate investment so attractive. From realistic costs and potential rental yields to the unique market dynamics of growing cities and the evolving needs of urban residents and tourists.
We also discuss the legal and tax aspects of buying and renting out a garage box.
For both experienced investors and new real estate enthusiasts, the insights shared here can help you make an informed decision about this unique investment opportunity.
Investing in garages is attractive due to the stable and potentially high rental income they can generate. This type of investment is more accessible and requires less upfront capital than traditional real estate, such as houses or apartments.
Additionally, the administrative process is relatively straightforward, and the risks of tenant-related damage are minimal. Compared to other real estate investments, garages offer an easy entry point and can provide a solid return.
A well-located garage or parking space can yield significant rental and resale opportunities, as demand is expected to continue growing in these areas.
Partnering with SparkSpot can help maximize your returns. Renting out to day-trippers and visitors can boost your income and ensure a smooth rental process. Want to know how we can help with renting out your garage box or parking space? Contact our team for more information.
The cost of a parking space varies significantly depending on its location and type (e.g., enclosed garage boxes vs. open parking spots).
Enclosed garage boxes are generally more expensive than open parking spots. Additionally, location and facilities impact the price. For example, a garage with a charging station in the city center will be more expensive than one in a rural area.
Supply and demand also play a crucial role in current garage and parking space prices. Prices may decrease in areas with a surplus of new construction projects.
However, compared to other types of real estate, garages require a relatively lower investment, making them more accessible to those with limited budgets.
Average price for a garage box: €30,000 – €50,000
Price in popular regions (e.g., Belgian coast): Up to €100,000 or more
Average price for a parking space: €10,000 – €30,000
Like garage boxes, parking spaces can become significantly more expensive in high-demand areas.
In cities where parking space is scarce, rental income can be significant. It’s important to research local market conditions and set competitive yet fair rental prices. A well-maintained garage in an area with high parking demand can provide a stable source of income.
Average monthly rental income for a garage box: €80 – €120
One of the main benefits of investing in garages is the relatively low entry barrier. Compared to real estate investments such as apartments or commercial properties, buying a garage requires less capital.
This makes it a more accessible option for first-time investors or those with a limited budget. Additionally, garages have lower operational and maintenance costs than other types of real estate.
A valuable additional investment could be installing an electric vehicle (EV) charging station. This can significantly increase rental income, especially with the growing demand for charging points.
In city centers, parking spots are in high demand due to expensive and limited street parking. Investing in centrally located garages can be highly profitable.
However, policy changes—such as new public transport projects or environmental initiatives—can reduce demand for private parking spaces. Investors must stay informed about current and future parking regulations to make sound investment decisions.
When purchasing a garage in Belgium, certain taxes apply. This includes registration duties, which are a percentage of the purchase price. These costs are directly related to the acquisition and should be included in the total investment costs.
There is an exception for VAT exemption when the total income is less than €25,000 in annual turnover, in which case you are entitled to the exemption scheme. However, keep in mind that this applies not only to rental income but to all registered income, including from other economic activities under the same VAT number.
It is also important to consider any potential appreciation of the garage, which can contribute to the total long-term return.
However, like any investment, it comes with risks—such as market fluctuations, local regulations, and tax considerations.
By understanding these factors, investors can make well-informed decisions that align with their financial goals.
This article explores what makes this specific type of real estate investment so attractive. From realistic costs and potential rental yields to the unique market dynamics of growing cities and the evolving needs of urban residents and tourists.
We also discuss the legal and tax aspects of buying and renting out a garage box.
For both experienced investors and new real estate enthusiasts, the insights shared here can help you make an informed decision about this unique investment opportunity.
Disclaimer: The information in this guide is intended as general advice and should not be considered legal or tax advice. Laws and regulations can change and vary depending on specific circumstances. For tailored advice and the most up-to-date information, we recommend consulting a qualified accountant or legal advisor.
Reasons to Invest in Garages
Investing in garages is attractive due to the stable and potentially high rental income they can generate. This type of investment is more accessible and requires less upfront capital than traditional real estate, such as houses or apartments.
Additionally, the administrative process is relatively straightforward, and the risks of tenant-related damage are minimal. Compared to other real estate investments, garages offer an easy entry point and can provide a solid return.
Growing Population and Declining Urban Space
With increasing populations and shrinking public space in urban areas, the demand for parking solutions is rising. This makes investing in garages and parking spaces even more attractive, especially in high-traffic urban centers. Tourist destinations, such as coastal cities, are also highly desirable regions for this type of real estate investment.A well-located garage or parking space can yield significant rental and resale opportunities, as demand is expected to continue growing in these areas.
Partnering with SparkSpot can help maximize your returns. Renting out to day-trippers and visitors can boost your income and ensure a smooth rental process. Want to know how we can help with renting out your garage box or parking space? Contact our team for more information.
How Much Does a Parking Space or Garage Box Cost?
The cost of a parking space varies significantly depending on its location and type (e.g., enclosed garage boxes vs. open parking spots).
Enclosed garage boxes are generally more expensive than open parking spots. Additionally, location and facilities impact the price. For example, a garage with a charging station in the city center will be more expensive than one in a rural area.
Supply and demand also play a crucial role in current garage and parking space prices. Prices may decrease in areas with a surplus of new construction projects.
However, compared to other types of real estate, garages require a relatively lower investment, making them more accessible to those with limited budgets.
Average price for a garage box: €30,000 – €50,000
Price in popular regions (e.g., Belgian coast): Up to €100,000 or more
Average price for a parking space: €10,000 – €30,000
Like garage boxes, parking spaces can become significantly more expensive in high-demand areas.
What Are the Rental Yields?
Garage investments can yield attractive rental returns, depending on location. Rental income is influenced by factors such as demand, location, and the condition of the garage.In cities where parking space is scarce, rental income can be significant. It’s important to research local market conditions and set competitive yet fair rental prices. A well-maintained garage in an area with high parking demand can provide a stable source of income.
Average monthly rental income for a garage box: €80 – €120
Low Barrier to Entry for Garage Investments
One of the main benefits of investing in garages is the relatively low entry barrier. Compared to real estate investments such as apartments or commercial properties, buying a garage requires less capital.This makes it a more accessible option for first-time investors or those with a limited budget. Additionally, garages have lower operational and maintenance costs than other types of real estate.
A valuable additional investment could be installing an electric vehicle (EV) charging station. This can significantly increase rental income, especially with the growing demand for charging points.
Legal and Contractual Aspects
When investing in garages, there are several legal and contractual factors to consider.Do you need a Notary?
In Belgium, purchasing any real estate, including garages and parking spaces, requires a notary. You will need to pay registration fees, which are 10% of the purchase price in Flanders, along with notary fees and administrative costs. These costs amount to approximately 14–15% of the purchase price.What Rental Contract Should You Use?
The rental agreement depends on your business model:- Long-term rental offers more flexibility than residential leases because garages and parking spaces are not subject to general rental laws. This gives landlords greater freedom, such as setting their own deposit and contract duration.
- Short-term rental with SparkSpot does not require a contract, as all bookings and agreements are managed via the platform—saving you administrative work.
How Does Local Parking Policy Impact Investment?
Local government parking policies can affect the value and potential of garage investments. Municipalities set rules regarding parking fees, restrictions, and the development of new parking facilities.In city centers, parking spots are in high demand due to expensive and limited street parking. Investing in centrally located garages can be highly profitable.
However, policy changes—such as new public transport projects or environmental initiatives—can reduce demand for private parking spaces. Investors must stay informed about current and future parking regulations to make sound investment decisions.
Pros and Cons of Investing in Garages
Advantages
- Attractive Returns – High rental income, especially in areas with limited parking space.
- Low Entry Costs – Compared to other real estate investments.
- Minimal Maintenance – Garages require little upkeep.
- Hassle-Free Rental with SparkSpot – Automated rental management for maximum returns.
Disadvantages
- Market Fluctuations – Prices and demand can shift due to policy changes and urban development.
- Limited Property Value Increase – Less appreciation potential than other real estate.
- Liquidity Risks – Garages can sometimes be harder to sell.
- Administrative Effort – Rental management can require effort, particularly for short-term leasing (outsourcing to SparkSpot can help).
Financial and Tax Considerations
When investing in garages, the financial and tax aspects are important considerations. These include, among others:Taxes upon purchase
When purchasing a garage in Belgium, certain taxes apply. This includes registration duties, which are a percentage of the purchase price. These costs are directly related to the acquisition and should be included in the total investment costs.Annual Rental Income Taxes in Belgium
For owning a garage and the generated rental income, you are subject to annual taxes. These taxes are based on the cadastral income of the property, adjusted with an indexation. It is important to include these taxes in your yield calculations to get a realistic picture of the net return on your investment.Property Tax
Property tax should also not be forgotten. This tax is levied annually based on the cadastral income of the property. The amount varies depending on the region and the determined value of the property, including a garage. This amount can impact the annual costs and returns of owning a garage.Income Tax
Personal income tax is applied to the income from the garage. This means that rental income is part of the total taxable income, which affects the tax assessment. This assessment depends on various factors, including personal tax brackets and deductions.Taxes on Sale Proceeds
The taxes at the time of sale depend on the duration of ownership and the capital gain realized.- Sale after 5 years: If the garage has been owned for more than 5 years, the capital gain is often not taxed. This makes long-term ownership fiscally attractive.
- Sale within 5 years: If the garage is sold within 5 years of purchase, there may be tax on the capital gain. Specific conditions and rates may vary, and it is advisable to seek advice from a tax consultant.
VAT Obligations and Options
VAT plays an important role when investing in garages. Depending on the specific situation and the nature of the transaction, different VAT rules may apply. For example, the sale of new garages is often subject to VAT.There is an exception for VAT exemption when the total income is less than €25,000 in annual turnover, in which case you are entitled to the exemption scheme. However, keep in mind that this applies not only to rental income but to all registered income, including from other economic activities under the same VAT number.
Calculating the Returns
Calculating the return on your garage investment requires a detailed analysis of various financial factors. This includes the initial purchase price, annual rental income, maintenance costs, and taxes. By weighing these costs and revenues against each other, you get a realistic picture of the actual return on investment.It is also important to consider any potential appreciation of the garage, which can contribute to the total long-term return.
Conclusion
Investing in garages offers a unique opportunity in the real estate market, combining low entry costs, potential high rental income, and minimal maintenance.However, like any investment, it comes with risks—such as market fluctuations, local regulations, and tax considerations.
By understanding these factors, investors can make well-informed decisions that align with their financial goals.
