When you hear the word "real estate investment," you probably picture a rental house, condo building, commercial building, or maybe even a REIT. But what if I told you one of the highest-yielding investments in real estate is… renting a deeded parking spot?
It is not a whole apartment building with all of the units rented. It is not a renovation project.
Just a piece of pavement (in my case, inside a basement).
Let us look at the math using my deeded parking spot, which I have been renting to other people in my building since 2021.
The ROI That Beats the Market
I bought my deeded parking spot for $12,500 because I bought my condo in 2021 when the market was ripping — rates were historically low, and the market was on FIRE. You saw a house or condo you liked, and it sold in a blink. I don't drive, so I did not really care about a parking spot one way or another, but my agent suggested I buy it so that the seller had no reason to take another offer — I think he was right, and I have no regrets about buying it (who would at getting an 18.77% net return a year).
I have rented my parking spot for $250/month. It is inside a garage and in West Loop Chicago, a popular neighborhood in the city. Like with condo units themselves, there is an assessment for the parking spot specifically — this is for the general upkeep of the garage, which I get. The monthly assessment for my parking spot is $54.47.
So my net income each month from the parking spot is:
$250 – $54.47 = $195.53
Multiply by 12 to get our net return:
$195.53 × 12 = $2,346.36
Now divide our net return by the price I paid in 2021 to get our annual return on investment or ROI:
$2,346.36 / $12,500 = 18.77% annual ROI
Let that sink in.
18.77%.
For posting a poster on a bulletin board — which I have only had to do once — and in my case has never gone unrented for more than a month.
An 18.77% net ROI is higher than:
- The average long-term S&P 500 return (~7–10% after inflation)
- Most rental properties (which often sit closer to 6–12%)
- Just about any savings account, bond, or ETF
Bitcoin is one item that does have a better return than my parking spot, with an average annualized return of 61.3% in the last 5 years and 82.0% in the previous 10 years.
And unlike a full unit rental, I have no need to deal with:
- Maintenance
- Appliances
- Evictions
Or any other household-type issue — "Hey, there is no hot water."
It's real estate without the headache.
But What If You Don't Drive?
That is the best part: I have not driven a car since 2016.
You don't need to drive — or even own a car — to make this investment work. In fact, the more car-optional your lifestyle, the more this becomes a pure yield play.
Parking is often in perpetual shortage in urban areas. Many condo owners or renters will happily lease your deeded spot, especially if:
- Street parking is tricky to find
- They work downtown and commute
- They don't want to deal with snow, tickets, or alternate-side rules
Street parking can result in stolen items from a car and broken windows — see photo below from West Loop:
You might live in the same building or lease it to someone nearby, depending on the building rules in which the parking spot is located. Either way, you're sitting on an income-producing asset that works passively.
Why Most People Overlook It
More people don't invest in parking spots because they don't consider it real estate. It's not glamorous. It doesn't come with granite countertops or staging photos.
But that's also why the ROI is so high — there's less competition. For people just renting a condo unit in your building, why would they rent a condo unit and buy a parking spot? Or the condo they purchased did not come with a parking spot.
In fact, most buyers think only in terms of their personal use:
"Well, I don't drive, so I don't need one." — I thought about this and am happy I owned a parking spot.
Final Thoughts: The Boring Math That Wins
Ask about the parking spot if you buy a condo or explore passive real estate income.
If it's deeded, and the numbers pencil out like the example above, it might be one of the highest-yielding assets you'll ever own.
And remember:
You don't have to park your car in it. You have to park your capital wisely.
P.S. Even Warren Buffett never made 18.77% year after year. But your parking spot just might.
Clearly, this is not investment advice. I am not a licensed investment professional… anymore. My Series 3 expired years ago, and as far as I know, there are no futures or options on deeded parking spaces ;)