New digital platform offers drivers parking spaces at homes and businesses and is opportunity for extra income. By Vivian Warby and Vivien Horler
Renting out your driveway, garage or parking bay could earn you up to R17000 a year, and could be the property play you have been looking for to make extra cash.
In the UK this market is known as the “driveway rental market” and was estimated to be worth £3.8 billion (more than R67bn at current exchanges rates) in 2018. A recently launched local website (basically Airbnb for parking) is offering a platform to earn extra cash by matching frustrated motorists looking for parking with homeowners with parking bays.
RentMyBay, developed by Capetonian Craig Murray, works this way: You let, in return for cash, a parking space you are under-utilising or not using at all to someone looking for guaranteed, secure parking for their vehicle.
“Our aim is to optimise parking spaces, creating more availability, additional revenue streams and less congestion,” says Murray, The space can be your driveway, off-street parking space, garage or lock-up, or even empty land. It doesn’t matter, as long as it is yours to let and is suitable for parking.
If you are a mini entrepreneur you could go from neighbour to neighbour and ask to help rent their space, and then list them on the site for extra cash “as long as they have the permission of the owner and the owner understands what they are signing up for”, says Murray. Currently the average rent for a parking bay in Cape Town’s CBD is between R800 and R1215 a month.
Murray says the site has a host who is currently earning R17300 a year from his parking bay in a CBD building, but the average is R12000 to R16000 a year in the CBD, depending on location. “Generally the closer to businesses the more expensive the bays become.”
He says many customers are drivers looking for a safe, affordable place to leave their car, but there are also boat owners and traders with small commercial vehicles looking for a spot. At present the service has 80 private bays in the Cape Town CBD, but Murray expects the number to increase this month when the platform is extended to businesses which will be able to let their company bays.
Businesses, body corporates and estate agencies which sign up will pay a commission of 6% to 8%. A parking “host” would not necessarily let their space for long periods, although they could do so. The site provides automated lease renewals.
If a lease is not renewed, the parking bay will automatically reappear on the system so a new tenant can be found. As with Airbnb, hosts can “block” bookings for certain periods, when they would not be at work, for example. The difference? No intrusion inside your house like when you let a room.
RentMyBay can also be used for events. A host near Kenilworth racecourse could let parking in their driveway only on the day of a big race.
Book your space instead of driving around for a place to park
Parking can be one of the most stressful, time-wasting and expensive aspects of owning a car and the number of motorists driving around the CBD looking for a parking spot adds significantly to traffic congestion.
Overnight parking on the streets also comes with security issues. RentMyBay developer Craig Murray knows all about this. He lived in a 13-storey building in the CBD which had no visitors’ parking. When his girlfriend visited, she had to park in the street, and her car was broken into and vandalised several times. Murray also realised that for much of the time, the parking available in the CBD was being under-used.
“I noticed how parking was severely under-utilised with bays standing empty during office hours or overnight. “Many people live in the city centre but leave during office hours to work in the suburbs, leaving their parking space empty during peak periods. The same applies to parking bays that stand open after office hours.
“I realised there was an opportunity for a shared parking rental concept, or ‘rent your bay while you’re away’.” He started developing an online platform last year, and the site went live in March this year.
“I wanted the site to be peer-topeer based, connecting drivers to the parking bay owners and to cater for various rental periods – daily, weekly, monthly and even annually.
“It was important for me to ensure it was a customisable platform, allowing users to be in full control of how they want to rent out their space, the availability, price and cancellation terms. My focus is on simplicity, convenience and automation. I want it to be as easy as possible and hassle-free to list and find parking.”
Listing a space on the website is free, but RentMyBay charges a commission of 5% to hosts and parkers. Tammy Hardy, head of marketing for RentMyBay, says current marketing is focused on Cape Town, the city where both she and Murray live and with which they are most familiar.
“But this is a parking solution that could be used anywhere, even globally. People living in other provinces can already use the system. Because it is designed as a peer-to-peer system, spaces can be listed in any area, making it possible for anyone living in those areas to book parking there.
Parked for profit: Billions in revenue
Parking is big business. In the United States the parking market generates around $30billion (about R423bn) in gross parking revenue a year, according to a November 2018 article in 2018 Deloitte Insights.
Americans on average spent 17 hours a year looking for parking, resulting in $345 per driver in wasted time, fuel and emissions. It became a lot more expensive in metropolitan areas. Drivers in New York spent 107 hours seeking parking, and paid $2243 a year.
Most parking is managed and leased by local authorities, adding significantly to municipal revenues. Deloitte Insights says the 25 largest US cities collected around $1.15bn from parking in 2016.
Pricey solution sold for premium
Parking space is at a premium in densely built up areas like Clifton, sandwiched as it is between the mountains and the sea. In January last year a parking garage in Clifton set a new record for brick-andmortar prices in square metre terms.
The 18m² garage – the size of some micro-units on sale in the city – sold for a staggering R2million, or around R111000/m². In December 2017 a parking bay at the White Cliffs in Clifton sold for R1.65m. But it’s not just Clifton. In August last year IOL reported that seven parking bays at a Napier Street residential development in De Waterkant sold almost immediately for R570000 each, or R90000/m².
Johan Malherbe of the Tower Property Fund in Cape Town says it is a matter of supply and demand. “In De Waterkant area especially, there’s not a lot of parking space available.
“If you take into account that people pay up to R30million for a house in that area – and sometimes these properties don’t come with parking – it’s not difficult to imagine that people would pay large amounts for a parking bay.” The seven parking bays were all bought by homeowners in the complex who needed extra parking.
Word of warning: potential problems
Investing in single parking spaces has advantages over investing in residential property, says the US website Unusual Investments. They provide superior yield, they have a lower entry point, and they are not management-intensive because they do not need much in the way of maintenance as wear and tear is limited to the odd oil stain on the cement.
And, if someone fails to pay the rent, you could probably have their vehicle towed away. But be warned: you would need to own a substantial number of bays to provide a decent income stream, says property pioneer Bill Rawson, founder of Rawson Properties.
Another problem is the future of motoring. If people in built up areas decide it is not worth owning a car, and choose to make do with Uber or self-drive cars in the future, you might find you have a depreciating asset on your hands.
In Cape Town buildings spaces are not often sold “unbundled” or separate from the apartment units. As Rawson says, 10 years ago parking was a good investment, but not so much today with the high cost of rates, among other things.
The pros of renting out your parking bay
- You could potentially make good money for little effort.
- No outlay required before you start earning.
- You don’t necessarily need to be at home when the renter arrives.
- Helps relieve pressure on street parking in heavily congested areas.
- Rental periods are flexible so you can rent out space when it suits you.
- Platform takes hassle out of dealing with reservations and queries.
- The responsibility lies on the motorist to have their vehicle insured, not on you.