Parking Lots and Passive Income

Yesterday after I wrote about passive income, I looked out my window at the parking lot that is next door to my building. This is an average sized parking lot and is parked four cars deep. As I looked down at the empty and meaningless people, I saw one car pull out of a parking spot and out into the street. No less than 10 seconds later did the attendant park another car in the very same parking spot that had just been vacated.

Do you know what this means???

Whoever owns this parking lot is making a lot of passive income.

That’s what this means.

The original car paid $10 to use that parking spot - for maybe a few hours. Then, that original car went home and then someone else paid $10 more dollars to use that very same parking spot! If you assume that this land is fully owned and there is no mortgage, that means the parking lot owner just made $20 passive income for doing absolutely nothing.

Parking lots have very little upkeep. You could practically let the lot deteriorate to rubble, and people would still pay you $10 to park their cars there. There is a lot attendant who keeps the keys and moves the cars around when needed, but there is no way he is getting paid more than $10 / hour. Even if the lot is open 24 hours / day, the employees only cost the owner $240 / day.

Right now there are more than 170 cars parked in the parking lot, and it’s only 9am. That means they have already brought in more than $1,700 today. By this evening all those cars will be gone and they will begin reloading the parking lot with more passive income - diners and party goers - probably at a higher hourly rate. The parking lot owner is making an obscene amount of passive income for doing absolutely nothing.

I think parking lots are the definition of Passive Income. Do you agree?