How many car parks should my property have?

Property investors often worry that their properties won't have enough car parks.

Most New Build properties have 1 car park, and investors may think: “Is that enough?”

That's a good question. And an important one too.

If you don't have enough car parks, it could be harder to get a tenant.

So, in this article, you’ll find out how many cars the average renter has. 

Quick facts:

• The majority (55%) of renters in New Zealand have 0 or 1 car
• Tenants don't tend to have as many cars as homeowners
• If you're investing in Auckland or Christchurch, 1 car park will be enough for most renters

How many cars does the average tenant have?

The average Kiwi household has *roughly* 1.75 cars.

So, many Kiwis will say the average is 2. And so you might think every property should have 2 car parks.

But the average masks the truth.

Without sounding too obvious, you can’t have ¾ quarters of a car.

You either have 0, 1, 2, 3, 4 or more cars.

That 1.75 number masks the distribution of cars that people actually have.

I'll give you an analogy. The average person in New Zealand might wear a medium-sized T-shirt.

But that doesn't mean Hallensteins should only have medium-sized clothing. They need a range – small, medium, larger, and slightly larger.

That way, everyone can get the clothing they want.

It's the same with car parks. Some people have 0, 1, 2, 3 or more cars. So everyone's need for car parks is slightly different.

How many cars do most Kiwis have?

Let's start by looking at the number of cars most New Zealand households have.

The number of cars you have depends on whether you rent or own your home.

The most popular number of cars are:

• 1 car for tenants (renters), and
• 2 cars for homeowners

There is a significant difference between renters and homeowners.

• 55% of renters have 0 or 1 car
• 67% of homeowners have 2 or more cars.

So the renters need fewer car parks than homeowners.

Property investors need to know this. If you're flipping a property – you probably will sell to an owner-occupier (homeowner). So you likely will need 2 or more car parks.

But, if you're buying a property to rent for the long term, you’ll rent to a tenant. So you likely only need to have 1 car park.

How many cars do renters have around the country?

The number of cars differs around the country. If you live in a large city with good public transport, you're less likely to own a car.

If you live in rural New Zealand, your household will likely need more cars.

Let’s look at how these averages vary throughout the country.

#1 – Queenstown and Selwyn District (high number of tenant cars)

People who live in Queenstown and Selwyn District have more cars. The average renter in Selwyn District has 2 cars.

Why is this?

Well, in Selwyn, the majority of homes have 4 bedrooms. They're often standalone houses with double garages.

It's also about a 20-minute commute to Christchurch City, so public transport isn't as good.

So it’s likely that a young family would have 2 cars.

In Queenstown, outdoor sports are popular. So households may have an SUV for the weekend and a commuting car for the week.

If you're investing in these areas, you might need to have more car parking available.

#2 – Auckland and Christchurch (average number of tenant cars)

In NZ’s largest city, 50% of households have 0 or 1 car.

Why is this?

Well, it could be because the cost of living is expensive, so families and partners share a car.

Or it could be the horrendous traffic. Some renters may prefer to use public transport to get around.

So, if you buy an investment property in Auckland with 1 car park, your property will suit at least 50% of renters.

In the Garden City, Christchurch, 55% of renters have 0 to 1 car.

Like in Auckland, properties with only 1 car park will suit most renters looking for a home.

Although 50% of Auckland renters have 2 or more cars, that doesn't mean everyone wants 2 car parks. Nor does it mean they're willing to pay extra rent to get 2 car parks.

Even if a household has 2 cars, they may decide to rent a more affordable property with 1 car park.

#3 – Dunedin and Wellington (low number of tenant cars)

Sitting at the lower end of the scale is Dunedin and Wellington.

In Dunedin, 66% of households have 0 to 1 car.

In Wellington, 74% of people have 0 to 1 car.

If you buy a house in Wellington, almost three-quarters of renters will be OK with 1 car park.

Though, if your target tenant is a family far away from the city, with poor public transport, you may need 2 car parks. Let common sense prevail.

Why do investors care about car parks?

Car parks are an important consideration when buying an investment property.

Not only do your tenants need a place to park, but car parks are expensive. Depending on where it is, properties with a car park are often $25 - $40k more expensive than those without.

If you choose to invest in a property that doesn’t have a car park, your tenants will need to park on the street. This means you’ll get less rent, but your property will be cheaper and may have a slightly better yield.

But property managers say rentals without a car park take longer to rent. On top of this, tenants who rent properties without car parks don’t tend to stay in the house as long.

So, is it a worthwhile investment to spend the extra cash on an extra car park?

Generally, getting a property with at least 1 car park is worth it. Though paying for an extra one could be an unnecessary expense.