Today’s question come from David in Belize.
Love the show and thanks again for all the work you put into it. We always hear if you see a problem, find a solution.
I see a big problem in Ambergris Caye Belize in parking. I think we could help the downtown area since there is always no parking and streets very congested.
We would have challenges as to locating a lot. The lot if we found would be around 50’ x 70’ . The garage would be for golf carts and we can do 4 or 5 floors.
We could do concrete, steel or a combination of them. I would want an elevator or 2 and maybe 2 entrances and exits. But 1 may work. So, 2 people working 2 shifts so like 5 people. Plus, maybe a maintenance person.
I feel we would get a lot of long-term workers paying and then the tourist.
The other challenge is the hourly or daily fee. I see some parking lots lot’s charge like $25 USD a day. The airport charges $2 just to go in and $25 USD a day as well. I need to do some more research but there are no garages here other then just empty lots they rent spaces out in Belize City and places like that.
I was wondering your thoughts on a syndication on a parking garage. The payback would be a bit long
The spaces would be like 100 for the 5 floors. After the setbacks, road drive paths. Maybe $800k to $1M to build. At $12.50 per day average Seems like the umbers work at 50% occupancy.
David, thank you for the kind words and this is a great question. I’ve been to San Pedro in Belize and I know exactly of the parking problem you’re speaking about. It’s a dense area and there is very little parking. There are narrow streets packed with small shops and lots of pedestrian traffic competing with golf carts for a clear lane. The town has lots of character, even if it seems a little chaotic a times.
Parking is one of those real estate plays that are not very sexy, but can be a great investment.
In fact, one of the largest companies in France called Vinci made its’ wealth globally by investing in parking lots all over the globe.
The problem with parking lots is that when many of the transactions are done in cash, for whatever reason cash has a tendency to go missing and not be fully accounted for. If you have a parking lot attendant who is handling a lot of cash and they’re earning only a few dollars an hour, the temptation is simply too great for them to pocket some of the extra change.
Even if you make the parking lot attendant a partner in the business, they could still steal from you. In tropical locations like Belize you could experiment with electronic payments exclusively, but I don’t know if that would be a barrier to adoption. It would probably work with tourists who regularly carry credit cards. But the locals may choose not to use it.
I would test market your idea on a limited basis with an existing ground level parking lot. Structured parking is expensive and you need to gain some operational experience in the local market to determine whether the idea will work. That will make for a much more compelling value proposition when it comes time to raise the capital for the construction.
Finding the right location for a parking lot can be a challenge. Sometimes, you may find an old building that is condemned or functionally obsolete. Parking can be a very viable temporary investment. You buy the derelict building, demolish it and build a temporary parking lot for a year or two while the developer who will ultimately develop that location gets their plans and financing together.
You may be able to propose a deal with a local developer to operate the parking on their behalf in order to gain first hand experience with managing a parking operation on the island.