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If you’re the owner of a car park you might be enjoying the extra income that you earn from the parking fees, but nevertheless thinking about selling the property. You should be aware that there can sometimes be a few barriers involved with trying to find a buyer for a car park, but this guide shows how you might still be able to get a competitive and quick offer for your property.
- When are privately owned car parks considered property?
- Reasons why buyers might be interested in your car park
- Problems you could face with trying to sell a car park
- Will you have to pay Capital Gains Tax when selling a car park?
- Your choices with attempting to find a buyer for a car park
- Frequently asked questions about selling a car park
When are privately owned car parks considered property?
Car parks, as their name suggests, are designated spaces where several automobiles can park, typically in exchange for the driver paying a set fee per hour for however long they’re parked. Some car parks are open 24 hours a day, seven days a week, whilst others are more limited.
There are two types of car parks; public and private. As discussed in the House of Commons Parking Policy in England document, Public car parks are those typically owned and operated by local authorities, whereas private car parks are those owned by a company or individual for profit. This guide assumes that you’re the owner of a private car park, which is considered to be commercial property whenever you attempt to sell it.
Car parks can vary across in size and structure – it could be a number of parking spaces on flat, open air land, or it might be a property with walls and a roof, and often more than one floor. Some car parks might even be underground, such as below office buildings in city centres.
Your car park might be a freehold property (rather than leasehold), meaning that you own any buildings and also the land on which it’s located. Or it could be a leasehold property, meaning that someone else is the freehold owner of the land on which the car park is located, and you pay that freeholder a set ground rent in exchange for you having ownership over the car park for a defined number of years.
Whatever type of car park you might own, there are pros and cons associated with this type of property that will affect how you attempt to sell it. The rest of this guide will walk you through those details, as well as offer tips on the best way that you can get a fast and fair sale.
Reasons why buyers might be interested in your car park
Owning a car park can be a lucrative move, because you will ideally make money from the fees that you are able to charge people for leaving their cars at your property. Even with staff salaries and operating expenses, car parks are seen as relatively profitable given the number of cars on the road. Some of the costs of building a car park are discussed in this Checkatrade article.
However, there might come a time when you have decided you would like to sell your car park. You may be looking to move overseas or somewhere else in the UK and no longer want to operate the business. Or perhaps you are ready to retire and selling the car park would hopefully generate some funds for that. Another reason for selling could be that you are simply tired of the work involved with running the business, and would like to find a buyer for it.
Whatever your unique situation, there are certain factors that you should be aware of that might make buyers more interested in making on offer on your car park compared to others. Knowing these in advance could assist you in attracting more prospective buyers to your property.
Good location: Some of the most sought-after private car parks are those in strong locations that have plenty of traffic and an ongoing demand for parking spaces. If your car park is situated within or close to a busy city centre, for example, it will likely be easier to attract buyers compared to trying sell a car park that is located on the outskirts of a remote village.
Redevelopment potential: You might find some buyers that do not want to own your car park to run it as a business, and instead would like to redevelop the land on which it’s located by building offices, other commercial space or even homes on it. Again, if your car park is situated in a very popular location, this likely makes it far more enticing to this type of buyer.
Proof of profit: Many potential buyers who are thinking about owning your car park as a business will want to know that it has the possibility of making them a decent amount of money. If you are able to provide receipts, tax filings and other documentation that shows the car park routinely generates a profit, this could help persuade someone to make an offer to buy it.
Problems you could face with trying to sell a car park
Just as there are several reasons that can make buyers more interested in your car park, there are also potential negative factors that could result in it being harder to sell the property.
Learning about these potential drawbacks is equally as important as understanding the advantages to buyers of owning a car park, because it will help you to see why certain people might lose interest in making an offer on your property. There are some factors that you will not be able to change, whereas other issues could potentially be fixed with time, effort and money.
Poor location: Just as a good location can help with increasing your prospects of a faster sale for your car park, the opposite is true if it’s situated in an area where there is minimal traffic. Buyers will likely see this as a reason to be concerned about the car park’s profitability.
Bad for redevelopment: Related to the problem of poor location, if there is a buyer who wants to purchase car parks in order to redevelop the land and build new properties, they will likely have less interest if your car park is in an area with low demand for homes or offices.
Structural damage: If your car park has any type of structural damage, which could include subsidence, leaks and more, then this will likely make most buyers perceive the property to be worth less than the asking price you’re seeking for it. Your options are to either invest funds into fixing the problem, or trying to sell the car park "as is" without making any changes. If you opt for the latter, you could consider selling to a fast buying company like LDN Properties, because they are able to make quick and fair offers to purchase all properties no matter their condition.
Will you have to pay Capital Gains Tax when selling a car park?
Whenever you’re trying to sell a car park or any other type of property, it’s important to budget properly and be aware of all the potential expenses of selling that you might face in the process of trying to attract a buyer.
One of those costs is Capital Gains Tax, which is a levy that the UK government charges on the amount of gain, or simply the profit, that you make when you sell a physical asset, such as a car park, home, or car. The tax usually only applies to the profit, and it is usually not charged on the hopefully larger sale price of the asset.
There are certain circumstances in which you might be able to reduce the amount of Capital Gains Tax that you owe, so you should speak with a financial professional to learn more about this possibility.
Your choices with attempting to find a buyer for a car park
If you are prepared to sell your car park, one of the key decisions that you will have to resolve is choosing the approach you would like to use to find a buyer for the property.
Your four usual methods to select from are using an estate agent, selling to a quick property buyer, trying your luck with an auction, or attempting to sell without any help. There are noticeable benefits to each of these choices, but you’ll find that some of the approaches also have rather major disadvantages, such as taking more than a year to secure a buyer.
In order to identify the method of selling that’s best suited to your wants and needs, it can help to write down all the relevant information about your sale, including whether you’re willing to pay any fees to a third party like an estate agent, your ideal asking price, and how long you can wait before completing the sale. Compare all of these details against the specifics of the four choices below, and that should help you in identifying the approach that will work best for your situation.
Using an estate agent
One popular way to sell a property is using an estate agent, because they will take on most of the work involved in finding a buyer, which removes a lot of stress and effort for you.
The estate agent will prepare a listing that features photographs of your car park and describes it, and then they’ll advertise this online, in local newspapers and their offices to generate interest from buyers. Estate agents will also schedule and typically lead viewings to show prospective buyers around the property, and they’ll hear offers, hopefully taking one through to completion.
This can be quite a slow process for selling a car park, and you should not be surprised if you have to wait for many months, or even more than a year, before you sell the property.
Also, estate agents will charge you commission if they succeed in selling your car park. This fee is deducted right away from the sale proceeds, which adds to your costs.
Unfortunately, some estate agents are known for quoting elevated sale prices for car parks and other properties even though they know that a sale can only be obtained at a much lower price. The reason estate agents do this is to convince you to use their services for selling your property, so that they will be able to enjoy the commission that you’ll pay them if a sale occurs.
For a better rough estimate of your car park’s potential ideal selling price, ask several estate agents to give you a free valuation. Next, visit top property sales websites such as Rightmove and Zoopla and write down the current and past sale prices of car parks that are similar in size and structure to your property. Finally, calculate the average of the estate agent quotes and the online sales prices to get a more accurate goal sale price.
Selling to a quick property buyer
Quick property buyers, like LDN Properties, are companies that have financial resources available to immediately purchase almost any type, condition, shape, age or size of commercial, residential and other property, including car parks. They are called quick buyers because the usual purchase takes just a few weeks, and that includes the time taken to exchange contracts. As a result, they are often the fastest option available for selling any sort of property.
The legitimate quick buyers also never charge property owners any commission, which means that you could count on receiving the full proceeds from whatever price the company might offer for buying your car park. That compares favourably to other methods of selling that will require you to pay fees, such as estate agents or auctioneers, as those will add to your expenses.
One reason that so many people trust quick buyers is that they will make competitive and swift offers for properties even if they have structural flaws, a poor location, or any other kind of negative issue that some potential buyers might otherwise see as dealbreaking problems.
LDN Properties, which was founded in 2003 and makes purchases across the UK, has a long and always growing list of properties that it can buy, which includes not only car parks but also guest houses, blocks of flats, British Iron and Steel Federation houses, properties that have high levels of asbestos, homes with septic tanks, flats located near to unsightly power lines, Wimpey No-Fines houses, listed buildings, vandalised properties, petrol stations, flats with noisy neighbours, and more.
Trying your luck with an auction
Auctioning your car park is another option. This is another choice that won’t require you to do much work, as the auctioneer will have the duty to create and advertise a listing for your car park, and host the auction.
If someone is interested in buying the property, they will be able to place a bid on it during the auction. Just remember that a winning bid is a legally binding agreement to purchase your car park, and either you or the high bidder can sue to enforce the sale. That’s why it’s so vital that you select a reserve price – which is the cheapest value at which you are willing to sell the car park – at an amount that will produce a profit from the sale, after subtracting all the costs.
Your biggest expense when selling this way is likely going to be the auctioneer’s fees. This fee will be taken out of the sale proceeds immediately, so you should plan for that extra expense.
There are some auctioneers who might charge less, and others that could be willing to negotiate a lower fee or make the winning bidder pay some of your costs. It’s always worth asking individual auctioneers about whether they’re willing to do this.
Selling this way is not the fastest method, as it will take at least a few months to complete all of the steps. There will be a delay of several weeks or more between the day on which you enter your car park for sale at an auction and when the auction itself happens. And if your property does sell, the winning high bidder has about 28 days to finish their paperwork and other required actions – unless you can persuade the auctioneer to set a shorter deadline.
Note that if your car park does not receive any bids, or fails to get any bids at the reserve price, it will go unsold and you’ll have to spend even more time starting over with trying to find a buyer.
Attempting to sell without any help
You might also consider selling your car park on your own, which means that you would have to create a listing for the property, advertise it, organise viewings and field offers from buyers. This is a huge undertaking and not something that you’ll be able to just do in your spare time.
Because of the large workload involved with selling a car park, this strategy is only suggested for those people who have prior experience in finding buyers for such properties, or that can contact a knowledgeable family member or friend who might be willing to help for free. If not, you create the risk of embarking on a very stressful, costly and time-consuming process.
Don’t be surprised if it takes more than a year before you get a serious offer from a buyer for your car park, because that’s the average timeline it takes to sell a property on your own.
This method of selling does have the clear benefit of not having to pay an estate agent or auctioneer any commission for finding a buyer for the car park, which can help to keep your costs down. However, you could be facing a number of other expenses when you attempt to sell without any help, including the costs involved with advertising the property’s listing.
There’s an easier way to get a sale without the stress of doing it on your own – just get in touch with a quick property buyer that promises not to charge you any commission. Not only will you avoid having to pay any fees, but you’ll also get to enjoy the benefit of the quick buyer’s no-stress, streamlined and hassle-free process for purchasing your property. And even better, most quick buyers can complete the act of buying your property within just a few short weeks.
Top queries and answers about selling a car park
Property owners thinking of selling quickly often have some questions for us about our service, ranging from the types of property that we buy through to selling development land. These are the main questions we’re asked about selling a car park:
