how to value parking spaces for multifamily quadplex

Question

How do i value absence of dedicated paved parking spots for a property?  Im looking to make an offer on a multi-family quadplex that does not have parking spots where most other fourplexs  on that street do have at least some paved parking. There is a medium amount of street parking and I can see the current tenants are parking on the street at night.  It gets crowded, but it looks to be at least functional to this point.

Ive googled and search on the forums here, (maybe poorly) but cant find any related topics.

I've pulled up the tax records and compared the land improvement valuations, but cant seem to digest how to come up with a number.  For example the surrounding houses on the county tax website as as follows:

Prop A - 3600 sq' bldg, 2400 sq' parking, 7700 sq' lot - Taxed Improvements Val: $150,000

Prop B - 3600 sq' bldg, 1400 sq' parking, 8700 sq' lot - Taxed Improvements Val : $210,000

Prop C - 3600 sq' bldg, 3000 sq' parking, 13300 sq' lot - Taxed Improvements Val : $200,000

The property I'm interested in :

Prop  - 3600 sq' bldg, 0000 sq' parking, 8700 sq' lot - Taxed Improvements Val : $160,000

Any suggestions?

Bill

Bill McCasky · Answer

Hey @Andrew Johnson - Thanks for the points to consider.

From what I've been told by the owner, the current rents are slightly inline, to slightly below others.  But that could be due to how updated the property is, current tenants have been there a while, etc.  You have a good point that it the 2 bedroom places will bring more cars.    As far as transportation, its reasonably close to a 1 line, but this city is pretty car dependent.   Your points definitely will help in marketing and planning.  Thank you.

Hopefully others can chime in on how much to adjust a sales price!

Andrew Johnson · Answer

@Bill McCasky Have you looked at rents for these units versus others?  I know when it comes to valuations (read: appraisals) that it won't have an impact but when you look at cash-flow and if it's an investable property for you I'm sure it will have implications.    One thing is for sure, it will limit your pool of possible rents.  And it might do so severely depending on the size of the units.  I'm just thinking out loud but a 1-bedroom/1-bath might have one person looking for parking.  That 3-bedroom/2-bath is almost certainly going to have 2 cars attached to it.  Is it close to public transportation where parking isn't necessary for a commute?

I know none of these questions are directly related to "how to value a parking spot" but it's something to think through when it comes to finding tenants, rent expectations, etc.  Hope that helps.  Or maybe it doesn't :-)