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Should You Invest In A Garage?

Should you invest in a garage?

Last Updated on September 20, 2020 by Mr. FightToFIRE

Over a month ago, I read JoneyTalks’ post detailing the sale of his parking spots in Oslo. He reminded me of the boom in parking spots and garage boxes (storage units?) that also took place in Belgium.

Investors consider garage boxes a carefree real estate investment with a high return. A garage box or car parking space costs an average of just under 30,000 euros (29,242 euros) in Belgium (in 2019). But watch out: one garage space is not the other, there are important differences to take into account, and does it still make sense in 2020 with fewer young people owning a car?

Depending on the location, think a capital like Brussels, buyers have to get deep into their pockets. You pay an average of 57,000 EUR in the most expensive areas of Belgium, such as the coast and Brussels. One factor, in any area, is that the demand for parking spaces is falling in cities with a lot of young people. Couples choose one instead of two cars more often. And just like single people, they take public transport or bicycles more often.

New mobility

It’s important to know that not every parking investment is a bull’s-eye. A vacancy is not uncommon, see JoneyTalks’ experience. A city’s parking policy and our new mobility habits also impact rentability. Cities continue to push cars out of the city center and encourage car sharing. This can reduce the demand for car parking spaces in certain neighborhoods, especially in cities where many young people live as they are less interested in owning a car compared to previous generations (Vergnani, 2019). It’s imperative that you research the number of empty garage boxes or parking spots in the area you are interested in.

But still an easy and simple diversification

Renting out a garage box or car parking space is a simple way to invest. It offers a stable rental income and the administrative burden is limited. Thanks to the simplicity of the construction, the risks of damage or non-payment are much lower.

A stable return, barely any worries, or maintenance… Sounds like the wet dream of every real estate investor. For a garage box, investors this is often the reality. Well-located garages remain in great demand as an investment. The returns are attractive, maintenance is limited and there are few problems with non-payment or vacancy. Also potential tenants often spontaneously offer themselves while waiting for a garage box to become available.

Limited budget

Average price for a garage in 2019

There is another plus: compared to other real estate investments, the investment budget for a parking garage is relatively limited. On average, a parking space in Belgium in 2019 costs ~29,000 EUR based on figures from the Federation of Notaries. a sizeable difference compared to 26,354 euros in 2009.

This average masks distinct differences. In the historic center of cities such as Brussels or Leuven, investors pay absurd prices: from 50,000 to 60,000 EUR or even more. Prices can also rise considerably on the coast. In the sea dike’s vicinity, it is usually impossible to build new garages, which makes them very popular. Conversely, outside the big cities, you can sometimes find a parking garage for around 20,000 euros. Per region: in Wallonia, you pay an average of 22,913 euros, in Brussels 27,838 euros, and in Flanders 31,172 euros.

Supply and Demand

Depending on supply and demand, the price varies enormously, especially in rural municipalities. There, for example, scarcity may persist for a long time until a large new construction project with approximately 30 houses and 60 garages is added. Then suddenly there is a surplus and prices plummet. In cities, the parking policy can determine the price. If the city council makes parking a lot more expensive, it can be more interesting to have a garage at your disposal than to buy parking tickets.

There are also factors that determine the price. Is the parking lot inside or outside? Is it a pitch or a box? Is the access secure? In new construction projects nowadays -in large part due to the increased popularity of electric cars- installing charging poles for electric cars and electric bikes is also done.

Just to be clear: we’re talking about closed garage boxes. Car parking spaces are cheaper but offer fewer possibilities. For example, you cannot use them as storage space unless you put a fence around them, but that might not be possible everywhere.

How much rental income can you expect?

Expect a return somewhere between €75 and €150.

The rental prices vary from country to country and municipality to municipality and even from street to street. On top of that, one year can be scarce, so the monthly rent for a garage box in a large city is 150 EUR, but a few years later the price can drop to 70 EUR, only to skyrocket again a short time later. Tenants of a parking space by definition live nearby, which is why the number of candidates is greater in the city than in the countryside. Prices are usually higher up there.

Apartments are becoming smaller and smaller, but the need for storage space is increasing. As a result, the need for extra storage space is increasing. Closed garage boxes respond to that need. This makes them more interesting than a garage spot.

A garage box is more expensive than a normal spot though. A box takes up more space, construction is more expensive, the bricks cost money… On the other hand, a box offers more possibilities than a regular spot. You can also store your junk there or place a freezer. That makes it a better investment and you can charge more.

A real return of 2 - 4%

Investors who have invested in garages over the past ten to twenty years in order to rent them out could count on a return of 2 to 4 percent.

If you have the choice, opt for a closed garage box. These are the easiest to rent out. Rents vary between 50 and 150 euros per month, depending on the location. At current purchase prices that correspond with a net return of 3 to 3.5 percent on an annual basis. Unfortunately, well-located garage boxes do not often come into the market. Most owners will keep them as long as possible as they provide a high return and cause little inconvenience.

How do you create a garage rental contract?

There are a few other things to arrange when wanting to lease. This is country-specific so I can only provide details for Belgium. Thanks to our complex structure it’s very likely that it won’t be as bad in your country ;).

You are free to determine the amount of rental guarantee. Standard house rental rules do not apply to garages. If there is electricity or there are common costs, you can charge these through the contract. As with a rental home, you have the possibility to index the rent every year. This must of course be written in the contract. Don’t forget the insurance and stipulate contractually that your tenant has to insure himself for his tenant risks. Renting a parking space is subject to common rental law, except if you rent it together with a house. You aren’t bound by the Housing Rental Act, which only applies to residences intended as your main residence. As a result, you are free to determine the rent guarantee or to charge the property tax to the tenant (see below). You can also set fixed-term contracts, like one year. You can even request a prepayment for the entire duration of the contract.

The best way to set up an agreement is to draw up a written document and have it registered. In this way, you avoid discussions about repair work or the payment of maintenance costs. You can also include a ban on storing hazardous substances, for example. In addition, in a co-ownership, there may be specific rules with which the renter must comply, for example, that he may only use his car park to park vehicles or that it’s only for non-professional use. In any case, the risk of damage to a garage is low and maintenance costs are limited.

Do you have to go to a notary?

Taxes are very country-specific so I can only accurately talk about Belgium. On every purchase of real estate in Belgium, you have to pay registration duties.
In Flanders, these are 10 percent of the purchase amount, in Wallonia and Brussels 12.5 percent. When it comes to new buildings, you have to pay 21 percent VAT on top of the purchase price. In addition, you pay the notary’s fees and the deed costs. These amount to a percentage of the purchase price.

You must be aware of the fiscal consequences of owning a garage box or parking spot. Let us take Joney’s garage spots as an example. For his first parking spot, he paid 925 EUR in registration fees but he was exempt from taxes since the income from it was below the tax-free threshold.

In Belgium, you are required to pay 10 percent registration duties plus deed costs, similar to Joney’s garage spots. However,  for new constructions you pay 21 percent VAT.

Garage owners are also subject to VAT, both professionals, and private individuals. You have to charge VAT on the rental price and declare it. Small businesses with an annual turnover of fewer than 25,000 euros can apply for a VAT exemption and escape most administrative and tax obligations. However, applying for a VAT number remains mandatory, even if you only rent one garage and apply for an exemption.

Income tax

First of all, as an owner, you will receive an annual assessment for the property tax in your mailbox. You can pass this tax on to the tenant via the rental contract.

Then you have to enter each property in your personal income tax return. If you rent out to a private individual, you will be taxed on the indexed cadastral income (Dutch: Kadastraal Inkomen or KI), which increased by 40 percent. You usually pay about 100 euros per year in a garage. If you take out a loan for the purchase, you can deduct the interest.

When your tenant deducts the rent paid as professional expenses, you will have to declare the actual rental income and it will become a lot more expensive. To avoid this, you can stipulate in the rental contract that the parking space may not be used professionally. Again, at least here in Belgium.


In conclusion, how to answer the question if investing in garage boxes makes sense? You can probably already guess answer based on the various things mentioned in this article that it depends.

Overall, even in a country with a heavy tax burden such as Belgium, a real return of 2 to 4% seems reasonable. As such, if you can buy a garage box in a country or location where the taxes are less cumbersome, a higher return is possible, excluding the increase in value of the box itself.

But like with a house, doing your homework is important, especially as local legislation changes rapidly in favor of less cars and more public space, though this can also seen as an opportunity because cars will most likely remain relevant for years to come.

Do you have a garage box or an open spot? Will you consider getting one based on this article or were you already considering this investment prior?

Please don’t hesitate to share your thoughts and comments below!


I'm a developer for a major financial institution in Belgium that is present in over 40 countries. I have over 8 years of working experience in the development of customer applications focussing on all aspects of banking. This helped me gain a deep understanding of the inner workings of a commercial bank. All of this experience in both banking and life culminates in this blog about personal finance and my fight towards FIRE.

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Is still a good idea to invest as a real estate: no fees or almost no fees for maintenance, no issue with renters that don’t pay, and if you want to sell/ put another renter there is no regulations to limit you and just a month before to inform.
Personal case: Brussels, in 3 years, we had 2 days vacancies – the first 2 after we signed at the notary and to put the announcement. So the only trick is to buy in a good place.


I think this rule is for each real estate.
Another rule is to buy with a price under the market, small enough to reduce the impact of the notary fees.
We are paying attention, too, on the “charges” – we found garages with 10 euro per month and some with 25 euro per month.
As our best acquisition is in the building where we are living, you are following to see any sell announcement and we are ready to buy another one. As a general remark, the best real estate in Brussels is a garage (or more precisely, several 🙂 ) . It might be interesting to calculate how many garages are good enough to cover a financial independence, with taxes and maintenance costs…

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