The best place to open a parking garage is in an area that will see major development in the near future. You can buy one in an existing high traffic area, but you'll pay more for it. Don't let that stop you from doing it if that's your plan; parking garages are great investments no matter where you go. Have the property appraised and make sure you're paying fair market value for it, then prepare a business plan showing how you plan to market your new parking garage, what you plan on charging for hours and days parked in it, and whether or not you're going to modify or expand it.
In a major city, the presence of your parking garage is all that you really need to make a profit. Go to downtown Los Angeles, New York, or Boston and you'll see the value of having an off-street option. Your main concerns as an owner are location, accessibility and security. If you're buying an existing facility in a high traffic area, find out exactly why the previous owners are selling. Parking garages are low overhead, so they're not the type of investment people get rid of. There could be a security issue, a back tax problem, or it could just be time for them to get out. Knowing the real reason could save you headaches in the future.
If you buy or build a parking garage in an area slated for development, you could end up paying less and making a small fortune in a short period of time. Many investors have chosen spots near planned sports stadiums or convention centers and bought land years before the project was completed. If you can afford to hold onto it that long, you'll do well. Let the bank know you need a commercial mortgage for the land, and maybe a development or construction loan for the garage itself. This type of business plan usually requires significant up front capital and a good credit history, but it pays off big.
Fill out our iBank loan application for a commercial mortgage now and ask for the development or construction loan later. We'll shop your request around and you should get multiple offers from banks, mortgage brokers, and private investors. Some of the latter could be very interested in a new venture for a potential future hot spot. Review all offers and select the option you like best.