Investing in a garage-proiezionidiborsa.it
In investments, the analysis of the opportunity cost is crucial, i.e. the evaluation of the first available alternative. It helps to optimize the final return, perhaps minimizing the risk.
With reference to real estate and government bonds, we have seen what the points of commonality and divergence are. We will now address the issue in terms of returns, asking ourselves how much do I earn if I invest 35,000 euros in a garage compared to BTPs and government bonds with (almost) equal risk and duration?
The real estate investment
The garage costs less than a house, so it is more accessible as an expense. However, choosing one garage or another is crucial for investment purposes.
The single boxes they have minimum/average dimensions of 5×2.50 metresThat increase in the double garage. It starts from 6×5 meters for two small cars to reach depths of 9/10 meters for 2 three-volume cars.
The surface available is the first element that does a lot difference in market valuebut not the only one. It rises or deflates in the presence of other elements (some hard to find):
- L’location (box in the center or in the suburbs, in the city or province?);
- L’floor heightfor any mezzanines that increase the surface and functionality;
- L’access to the box (if condominium: how many can access the area?);
- the state of the property.
Barely, the value of a single garage in a big city can go from 40,000 euros in the center up to 10 thousand in suburbs. Tax expenses and miscellaneous fees must also be added to the initial costs.
How much do I earn if I invest 35,000 euros in a garage compared to BTPs and government bonds?
How much does a garage make? L’rent depends on many voices, the most important are the surface and L’location. For a playpen
in full centre and/or a ZTL area, especially if in a large or touristic city, the rent can reach 180/200 €/month.
In the case of a double garage, the initial cost rises but so does the potential return. Likewise, any mezzanine can be used as income.
Let’s take the case of a single garage in the city center and one in the suburbs. Again, let’s imagine an initial cost of 35,000 euros in the 1st case and 20,000 in the 2nd. Finally, let’s assume an annual income of 2,040 euros (170€/month) and 1,200 euros (100€/month), respectively. The gross return would be 5.83% in the 1st case and 6% in the 2nd.
Let’s consider the BTP with ISIN IT0005273013, issued on 1 March 2017 and maturing on the same day in 2048 (residual term: 25 years). The gross coupon is 3.45%, while the gross annual return is 4.33% as it trades at 87.40 cents.
Pros and cons of the two alternatives
Both options have pros and cons. The furniture one enjoys a favorable tax regimein addition to being relatively easier to manage compared to the property. Let’s think about the buying and selling practices, the search for the tenant, etc. All is twoInstead, they can be resold prematurely and generate a capital gain.
However, optimizing the steps of the entire real estate investment Perhaps better performance can be achieved than that in titles. How to do? First of all you have to buy the garage below cost compared to its market value e prefer it in an area with high demand of parking. Also, if you can to renovate it for little money the market value increases and therefore the potential final capital gain.
