Vacant units and unused parking spots can be rented to travelers or commuters

Guest Post by Jeremy Zucker

Photo by Maria Orlova

With lease-up periods for new apartment complexes running anywhere from six to fifteen months, developers are always looking for ways to generate income as quickly as possible. They also want to pass on some of this money to their investors. These backers helped fund the project and want to see a return on their investment after taking on much risk. Today, there are a few ways for developers to find a use for their vacant spaces and pass on some of the positive cash flow for these projects to their investors sooner. And, because of technology, implementing these solutions is fast, easy and cheap.  

Some developers have realized how to monetize their empty yet-to-be-leased units by turning them into short-term hotel rooms. In fact, this trend is growing at a rapid pace, fueled by services like Airbnb and other “alternative” lodging solutions. They help fill a niche, especially for those looking for longer-term temporary accommodations, like people who moved to a new city for work but have yet to find housing or those who need space while renovating their homes. It is also attractive to families visiting an urban area to have a full-service kitchen or easy access to laundry facilities during their stay to help reduce costs. 

There are now a plethora of services that will assist a developer in listing these units for short-term rentals. How much these units can be rented out for and how much revenue they generate will depend on several factors. For example, units located in or close to a major metropolitan area like New York, Los Angeles or Chicago, could command a higher price than areas like Portland, Des Moines or Milwaukee. Proximity to significant tourist attractions, like Orlando (Disney World, Universal Studios, Sea World) or Las Vegas, would also see higher rates. Finally, developers should expect a decline in demand between November and March due to the seasonal nature of tourism. 

Another short-term solution to generate cash for unused apartment complexes is all those parking spots. In most cases, they’re left empty, even when the vacant units are being rented out as temporary hotel rooms. Many buildings are missing out on a steady and lucrative income stream. 

Each spot could be rented out daily, weekly or monthly during the lease-up period because there are a growing number of commuters looking for convenient parking. It may sound like a complicated process, but today’s technology makes it easy to track and rent out individual parking spaces.  

It’s a system that can be implemented quickly, making it a perfect choice for generating cash flow during the lease-up period and beyond. A smart parking solution can also be used once residents have moved into the building. You can simply use the same parking technology to give residents permanent parking spots while renting unused spots. The best of these systems even makes it possible to manage using spaces for both; when a resident leaves for work in the morning, their spot is added to the list of the available spaces. That boosts the earning potential for each parking spot, especially when you consider there are little to no capital expenditures for these spaces. If it sounds like complicated technology, that is because it is. Fortunately, that is only on the backend, and it’s simple for both parking managers to set up and those in need of parking to use. 

Parking has become a hot commodity in many cities, making innovative solutions like this a potentially lucrative operation. As disruptions from the pandemic ease, we’ve seen a rise in the number of workers returning to the office. However, many are eschewing public transit or ride-sharing options due to their health concerns. That means more vehicles looking for fewer spots. The resulting shortage of spaces has led to increased traffic congestion as anxious commuters circle endlessly searching for parking that simply doesn’t exist. 

Solving this parking shortage requires a smart approach, and capitalizing on available parking at new and existing apartment buildings is a prime example of exactly the sort of innovative solutions needed. Building new parking lots or parking garages is economically unfeasible, especially when so much time and effort has been spent to turn those parking areas into other buildings. Instead of building new spots, it makes much more sense to leverage the empty parking spaces already there. After all, they do not generate any income when unattended. Plus, being efficient is great for the developer’s bottom line and the environment. The faster a car can be parked, the less time it spends circling around burning fuel. Considering it’s not uncommon for cars to spend up to an hour looking for parking in some urban areas, this effect should not be overlooked. 

During the lease-up period, building developers are making little to no profit. But some outside-the-box thinking can help bring in cash during this lean period. The advances in technology help make this possible, convenient and straightforward. Having the ability to monetize unused units or parking spaces is something managers should seriously consider during and after the lease-up period. The ability to generate this type of revenue could be a game-changer and help boost the developer’s return on investment. 

Jeremy Zuker is the co-founder of WhereiPark, a technology company that enables multifamily residential and commercial property owners to discover new revenue sources through innovative solutions that leverage unused parking spaces.