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How to pick the best parking allocation strategy for a residential building

December 6, 2020

Evan Goldin
Co-Founder/CEO

TABLE OF CONTENTS

How to pick the best parking allocation strategy for a residential building


There are two things residents want when it comes to parking — adequate parking near their homes and enough spots for their vehicles and their guest’s vehicles when needed. These requirements seem very simple on an individual basis, but once multiplied, it presents a complexity of challenges that building planners have been grappling with for decades.

Residential buildings have three parking options — unassigned parking, assigned/bundled parking or unbundled parking. Each option has its advantages and disadvantages, and we’ll highlight how Parkade can shift which option works best for your building. 

Unassigned parking spots

Typical unassigned parking lot at a residential building.

The most significant advantage of residential unassigned parking spots is that they are utilized on a first-come, first-served basis. However, this tends to be their most significant disadvantage as well since parking is never guaranteed.

Unassigned parking spots maximize usage but minimize reliability. These spots are available to everyone 24/7, and there are no limitations on how long you can leave your car parked. Residents never know whether they’ll find an available parking spot at their building because other residents or even their guests may have already taken all the available spots. 

Additionally, unassigned parking spots have caused some sparks between neighbors. Sometimes residents might prevent car owners who don’t live in their buildings from parking in the unassigned spots. Some extreme cases may include residents preventing the driver from leaving by parking another vehicle directly behind the non-resident’s parked car.

Assigned/bundled parking

Reserved parking is reliable, but often sits empty.

Assigned or bundled parking spots are often included in the price of renting or buying a home in a multi-family building. Assigned parking spots give owners a hassle-free parking experience since they know that they have a parking spot dedicated for their use only. 

Assigned parking spots maximize reliability, but they minimize the utilization of parking spots. Only one household has access to the parking spot. 

When it is not in use, no other resident can park there. This can result in a parking spot sitting empty throughout the day when the owner is away from home, or worse — permanently empty if the resident doesn’t have a need for the spot. 

Happily, Parkade can solve this problem! Parkade makes it easy for residents to share their assigned spots with other residents and other residents’ guests, just as we’ve done in many buildings. 

Unbundled parking

Unbundled parking is an excellent strategy that separates the cost of housing from a cost of parking space. It’s quickly gaining popularity around the country, and is increasingly recommended by policy makers and utilized by developers.

Unbundling allows residents to rent parking separately from their housing. By doing so, residents can save money and space by using fewer parking stalls, and building owners can quote lower prices for apartments or condos when advertising them. Unbundled parking is also more equitable and can reduce the total amount of parking required for the building.

Unbundled parking is a better option than assigned/bundled parking, as the building can lower the rents and also better utilize the usage of available parking spots. For example, instead of renting a 1-bedroom with parking for $1,200/mo, the unit could be rented for $1,100/mo and parking rented separately for $100. 

This strategy leads to residents who don’t really need parking deciding to utilize fewer (or no) parking spots, while other residents who want extra parking can gain the ability to rent extra spots.

This parking configuration, however, usually has some downsides in most buildings (fixable with Parkade!). 

In general, most buildings have 30-day or 6-month minimum rental terms to rent a parking spot, due to the work usually involved for property managers to handle billing and assigning the spot. This leaves money on the table from residents who would pay for spots for hours, days or weeks, but don’t have the option from their building’s managers. 

In most buildings today, unbundled parking will still sit empty when the owners are away from home as they can’t share it with other residents.

Parkade upgrades assigned, unbundled parking

Unassigned parking is easy, but is infeasible in most buildings due to demand for reliable parking. 

Assigned and unbundled parking is usually the preferred option in most buildings, but takes time considerable for property management teams to manage — as spots assignments must be communicated, spots can’t be double-assigned to different people and payments/leases for unbundled parking must be handled. 

Parkade makes all of those problems go way — reducing empty assigned parking and making unbundled parking a lot easier to implement.

Lease for any duration

With Parkade, you can avoid imposing minimum amounts of time for the leasing parking! 

This is a huge win for tenants, whose parking needs vary and have frequent needs for short-term (or shorter term) parking than what’s usually available. Parkade is duration-agnostic, so residents can lease parking for any period — with no involvement from property management. 

This is a huge step toward increasing building revenue and resident satisfaction, especially at buildings that have empty parking.

Monetize guest parking

Your building can finally eliminate the “Guest Parking” spots, which are often abused and rarely a revenue source because they’re so difficult to charge for.

Instead, Parkade can help buildings eliminate these spots and just convert them to unbundled parking. That parking can instead be rented by a resident for themselves, or for guests — but the “guest parking” signs that invited abuse and were a source of frustration can go away. 

Maintain security by only selling spots to residents

Would you like the parking spots in your building to be available to residents only? 

Parkade can help out with that, too. The app is just like a Facebook group, giving you full control over the level of privacy that's right for your building, including the ability to restrict access only to residents and staff.

Make your residents happier

When your building rents unbundled parking, a spot is typically booked monthly by a resident — or not at all. Letting a spot sit empty because someone is not willing to book it long-term is a huge waste. Instead, you can use Parkade to rent it for any period of time, whether it is for a few hours, days, or weeks.

Dynamic pricing

Many buildings have static pricing on their unbundled parking — which naturally produces a poor outcome. That means that either parking ends up being too expensive (resulting in too many empty spots) or too cheap (resulting in all spots being sold out, and having to create a waitlist). 

With Parkade, buildings can automatically adjust prices to manage demand and offer a mix of short-term and long-term parking.

Tired of not being able to park near your building? Parkade can help you resolve that issue, whether your building offers assigned or unbundled parking spots. With the help of our app, residents can share their assigned spots when they are not in use with others. 

Parkade is a win-win solution both for residents and the building management.

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BlogParking Management Software ROI

Investigating the ROI of parking management software

With parking being one of the largest drivers of ancillary revenue at multi-family properties, it's imperative to get it right. But just how much return can you expect from parking management software? Read on to find out.

Published: August 7, 2024
Hannah Michelle Lambert
Content Writer
Boosting ancillary revenue is often a major focus for property managers and owners alike.

Especially given that the baseline forecast for rent growth is slightly lower this year than average (2.5% versus 2.9%), properties are increasingly looking for ways to raise their bottom line without compromising the quality of living for their residents. 

One often overlooked but significant opportunity lies in parking. If managed well, it’s a potential treasure trove for additional revenue. But that’s only if it’s done well. 

Parking tends to be one of the biggest thorns in the side of a property manager. Because traditional systems — like spreadsheets and rentable items — are not built to handle tenant parking efficiently, teams aren't able to reap the full benefits parking has to offer as an ancillary revenue source. As soon as a team makes the decision to invest in a proper parking management system, the benefits often more than pay for themselves.

In this guide, we will explore those benefits, touching on both the financial and operational upside of a solid parking management strategy.

We’ve combed the data from all of our clients to identify the exact numbers to prove that there truly is ROI in parking management systems like Parkade. 

Understanding parking management

Before we dive into the numbers, let’s first establish a baseline of what exactly parking management entails. As any property manager will tell you, it involves much more than just hanging a tag on a resident’s car and calling it a day.

The key components of a parking management system are:

  • A system of record to track parking assignments, lease lengths, vehicle details, and parking prices, ideally integrated with your PMS.
  • An enforcement strategy that ensures parking rules are clear and establishes consequences (typically fines or towing) when someone breaks them.
  • A method to pay for parking, whether it’s bundled in with rent (which we don’t recommend) or paid for in a separate system.
  • A self-serve system for residents and guests to book long or short-term parking. 
  • If there is a gate on the property, provisioning and deprovisioning of gate entry should also be considered in the parking management strategy. 

The old-school way of addressing these needs isn’t cutting it anymore. Many properties are still using manual processes, like an Excel spreadsheet, rentable items, or even a physical piece of paper to keep track of their parking. 

And far too often, properties are relying too heavily on staff members to handle parking matters that take up a significant amount of time, like enforcement or guest parking.

Moreover, there’s one point that just can’t be ignored: If you’re still using old-school parking management systems like spreadsheets and rentable items, you’re leaving money on the table. 

So the parking management we’re discussing here that delivers positive ROI is a technology-led solution that automates all aspects of parking operations, improves resident experience, and unlocks new revenue streams.

Setting the stage: Residents value good parking

Delivering on resident expectations should be a main priority for any multifamily property, and parking is one area of the resident experience that is especially critical to consider here. 

65% of property managers cite parking as a top concern among residents. Whether it’s for existing residents or prospective residents, providing a simple, reliable, and flexible parking solution has a direct impact on the success of your property. 

Part of this is due to reputation. Properties have reported a 44% increase in their reputation scores after fixing their parking problems. And this boost in a reputation score can trickle into several different areas, boosting not only the number of new residents, but also leading to more renewals from existing residents.

But we know you want the hard dollar amounts, so let’s talk more about some real-world outcomes that Parkade's parking management software delivers. 

So, what do the numbers say about the ROI of parking management software?

Long-term net parking revenue for stabilized buildings

Once properties implement a system to help them optimize pricing and management of long-term parking, they see immediate gains in their long-term parking revenue. The average 6-month increase in net long-term parking revenue for the cohort of 7 properties we sampled was 24%, translating into thousands of extra dollars. 

Long-term net parking revenue for lease-ups

Better parking management also empowers properties to far outperform their projected revenue from long-term parking when they’re in the lease-up phase. 

On average, properties from the cohort we sampled estimated that they would bring in $15,925 on average from long-term parking revenue per month. But thanks to Parkade helping them optimize their parking strategy, better enforce their parking rules, and keep a better record of who is parking where, the average revenue from long-term parking was $23,450 on average, which is a 47.3% increase from the estimates in their pro forma. 

Total net parking revenue for stabilized buildings

For buildings that are already at full occupancy, the average increase in parking revenue sits at 31% once they implement Parkade’s parking management solution. 

Revenue metrics for lease-ups

The best time to implement new parking management systems is at the inception of the building. Getting parking right from the beginning ensures that you are maximizing total parking revenue from day one, as well as establishing a positive reputation around parking. Many properties underestimate the revenue from long-term parking and may often leave out potential short-term parking revenue altogether. 

When a few properties we worked with during this phase were estimating parking revenue at the start of their lease-up, they estimated around $35,000 on average. But the results, since they decided to go with Parkade right from the start, blew those numbers out of the water. In reality, they were able to bring in closer to $58,000 on average, which is a 66% increase from the estimates.

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Short-term parking: An opportunity

The boost in revenue continues to be apparent when you zoom out to look at short-term parking, too. Short-term guest parking can be one of the most underutilized revenue streams, and represents a huge opportunity for multi-family properties to tap into. However, it's historically been very difficult or impossible for properties to see this revenue without parking management software that automates the process.

Especially in popular areas, like city centers or near shopping malls and sporting arenas, there’s often a high demand for short-term parking. When properties put a system in place to monetize this guest parking, they can unlock hundreds or even thousands of extra dollars per month. 

Automating guest parking

Without a good system in place to manage parking, many properties often leave guest parking as a free-for-all (meaning they don’t make money from it), or if they do attempt to monetize guest parking, it turns into a massive beast to handle. 

Erica, a property manager at Thrive Properties, told us about her pre-Parkade experience with guest parking, preventing them from delivering on a key resident need: “There was no world where we were doing short-term parking by the hour or even by the day because there was just no way to manage that.”

If you have a complicated or inconvenient system for guests to reserve parking, especially one where they have to walk into the office during office hours, guests are often more likely to try to get away with not paying for parking. (And if you don’t have a great system to enforce parking, they may very well get away with it).

With the right parking system, you’re able to give guests a flexible, 24/7 solution, removing any previous barriers that may have caused them to break the rules out of convenience. 
Maximizing guest parking availability

Another way that manual parking management may stand in the way of effectively monetizing guest parking is the inability to accurately track how many spots you have available for guests to reserve in the first place. 

Taylor, the property manager at Strata and Venue, shared her experience of desperately needing more guest parking and discovering they had a full 50 more open spots than they thought. 

“We actually had way more spots that we could have used for guest parking, but we didn’t know that because of the way we were using our parking system. Not to mention, we wouldn’t have the system to leverage them without a Parkade.”

When your parking management system gives you an accurate, real-time view of available spots, you can leverage guest parking to its full capacity.

Utilizing idle parking spots

A reliable parking-management system also allows you to make the most use of every single spot available. With technology that uses smart inventory management, properties can release idle or unassigned parking spots into the system for short-term use. So spots that would have otherwise been sitting empty between leases can suddenly be leveraged as an extra revenue-generating spot in the meantime. 

Net revenue for short-term guest parking

When properties have a great system to implement paid guest parking, without putting too much strain on their staff, they immediately see a boost in revenue.

They’re able to turn an operation that was perhaps bringing in no money — or some revenue, perhaps at the expense of staff time —  into a significant revenue source with little-to-no staff involvement. 

On average, Parkade customers experience a 303% increase in their guest parking revenue after Parkade fees. And there were some properties that saw almost a 400% increase.

Opex (operational expenses) savings

When handled manually, parking management can steal hours from on-site property management teams every week. Between fielding requests or complaints from residents, tracking down parking records, walking the lot to enforce rules, handling guest parking, and manually inputting rentable items, parking can quickly balloon into one of the most time-consuming tasks for staff.

Parking management software can automate away a lot of the most tedious aspects. For example, Parkade gives residents self-service access to reserve and pay for parking (while allowing for any rule sets the property wants to enforce), provides hands-off enforcement support, and even automates gate access via the app so that teams don’t have to worry about distributing or replacing clickers. 

Properties have seen that the time teams no longer spend on parking leads to a direct decrease in operational expenses. As a result, they can redistribute those team members' time to more meaningful tasks.

On average, we’ve seen properties decrease their operational expenses by $60,000-$100,000 from savings on parking operations alone. This means that they were able to save what’s equal to a full-time employee’s salary. 

Annual NOI improvement

All of the revenue metrics mentioned up until this point have been after Parkade's fees. 

When you roll everything up together — both the increase in revenue (after fees) and the opex savings — investing in parking management software has an incredibly positive impact on annual Net Operating Income (NOI).

Whether teams are looking to calculate their property value, secure financing, make operational decisions, or pitch to investors, NOI is one of the most critical numbers to boost. 

By coming at NOI from both sides, in terms of opex savings and revenue generation, parking management technology is extremely low-hanging fruit when it comes to boosting NOI. 

At the Parkade properties we surveyed, teams saw anywhere from a $66,000 to $126,000 improvement to their net operating income from parking alone. 

While parking may not seem like it deserves to be the biggest priority for many properties, the numbers tell a different story. By investing in a proper parking solution, properties are able to significantly improve upon all of their business goals, whether it’s boosting revenue, streamlining operations, improving resident experience, or all of the above. 

About Parkade

Parkade is the #1 parking management software for multi-family buildings. With our resident-facing app and staff dashboard, parking runs itself. Your team will boost revenue, reduce time spent on parking, and improve experience for residents and guests, all without lifting a finger.

Explore our features below, built for communities just like yours.

Resident Parking

Track all resident assignments and easily collect payments

Seamless Visitor Parking

Guests securely book parking last minute, or in advance

Gate Integration

Let parkers open the parking gate via our mobile app

PMS Integration
NEW!

Sync Parkade with your property management system (PMS)

24/7 Enforcement

Parkade automates enforcement, and we even calling for towing

Custom Parking Rules

Apply your preferred parking rules and prices automatically

Revenue Management

Explore our suite of revenue-boosting tools for parking

Public Parking

Located in a busy area? Optionally rent excess parking to the public

Ready to transform parking?

Ready to optimize your parking operations and start seeing the immediate ROI?

Reach out to schedule a demo now.

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