No Business Like Real Estate - The Parking Type

Many records were broken when worldwide (stock) markets traded during the first week of 2008. It was the first time in many years that markets closed weaker on the first month of trading. This is also the first time, in as many years, that the US stock market is down on an election year.

I don't think I'll ever grow tired of the stock market, just wary.

I went to the mall today and almost all the shops had a four letter word that spelled S-A-L-E.
January is usually the slowest month for any business, especially in the Philippines. And upon saying that, it suddenly dawns on me that one of the best businesses to be in is real estate, not your typical housing real estate boys and girls, but PARKING real estate.

Whether shops in the mall sell or not, families, friends, and married or dating couples will always troop to the malls. I'm quite surprised that even on a weekday, the parking's almost full. In a span of three days, I've visited about 4 malls, and I'm quite surprised at the different rates of parking fees malls charge.

SM Manila - Php 25.00 flat rate
MOA - Php 45.00*
Bonifacio High Street - Php 35.00 first three hours
Greenbelt - Php 45.00*
Rockwell - Php 45.00 first three hours

* I'm not sure if this amount is accurate or if there are variables like hour rates after the first 3 hours.

People can correct me if I am wrong. This is for public consumption. I think one day, I'll be able to compile all the rates here and do a comparative study. That's assuming I have the time and interest to do it.

Let's make a sample computation. Sample Computation by the way, is the favorite phrase of real estate agents.

Let us assume that there are about 200 parking slots. A mall is open approximately 12 hours each day. Let's further assume that the 200 parking slots are completely taken twice in a day, with each car only staying for the minimum 3 hours. I'll take Php 40 as the median price. The computation therefore, looks like this:

Php 40.00 x 2 x 200 = Php 16,000 x 30 days = Php 480,000 gross earnings per month
Php 1,440,000 gross earnings per quarter
Php 5,760,000 gross earnings per year

This is just one mall. Wow.

I am not entirely familiar with real estate taxes, but since this is not a good or a service, this is therefore not chargeable as VAT (?). I used to know parking lease laws but well, let's just say I need more iodine for my brain. :-p

One of the best ways to manage idle properties is to lease it out as a parking lot. You don't have to worry about condominium maintenance, noisy, lousy tenants. And with OFWs having upgraded their tastes from television to automobiles, you can bet your asses (or assets hehe) that motor sales will go up more and more.

As Lex Luthor stated in the so-so movie Superman Returns, real estate is getting scarce.

You will note that guerilla investing (i.e. this blog) will start to encroach on other topics regarding investments. Investments cover a wide spectrum and by starting this entry, I will begin to unveil, slowly, what Guerilla Investing will ultimately be about. Stay tuned for more!