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Indoor vs. Outdoor Parking Lots: What’s Better as a Business?

Not only are parking lots profit-generating, but they’re also passive income streams that require little to no maintenance when constructed right. Deciding what kind of parking lot to open can be difficult, so here are four factors that may help you reach the right conclusion:

1. Overall Space

When it comes to managing parking lots, it’s important to consider how much space you can use as actual parking spaces. This is because the space you have directly affects your business’s profitability, which is why you need to take this factor into account. Here’s how these two options differ:


If you plan to build an indoor parking lot, you’ll have the opportunity to create a multi-level parking garage. This means that you’ll have much more space to offer your customers, especially when compared to outdoor lots. Plus, you won’t have to worry about being affected by the elements.


On the other hand, you won’t have to construct a building anymore if you plan to build an outdoor parking lot. But this also means that you’ll only have a limited number of parking spaces for your potential customers. And fewer spaces mean less profitability for your parking lot business.

2. Construction

Choosing to open a parking lot means you have to prepare your land for the business venture. This is because you can’t just buy a piece of undeveloped land, hang a sign that says, “Open for Business,” and expect customers to come flooding in. Here’s how the construction will differ based on the two options:


If you plan to build an indoor parking lot, you’ll need to construct an enclosed space complete with a roof and pillars to support the weight. The higher your parking building is, the longer it will take to construct it. And it will also be more expensive to build because of the upfront costs of materials as well as labor.

Aside from those, you’ll also need to provide enough lighting for the indoor space, especially at night, so that your customers won’t have trouble finding their way in the dark. Indoor parking lots are often considered safer than outdoor ones, so you need to install security systems or have guards to monitor the area.


Unlike indoor parking lots, all you’ll need to create an outdoor parking lot is to pour concrete over the undeveloped land. If you want, you can even use petroleum-grade bitumen to ensure that your parking lot will be built for durability and longevity, especially because it will always be exposed to the elements.

Instead of walls to enclose the space, you can just install fencing around the perimeter of your parking lot to keep it safe from thieves. Of course, you’ll also need ample lighting and security cameras for your outdoor parking lot, but it’s a lot less than what you’ll have to provide for an indoor one.

3. Profitability

You’re starting a parking lot business to generate a profit, which means you have to consider each option’s profitability before deciding the right one for you. Remember that a larger parking lot means more parking spaces; that said, here’s how you can earn more depending on what you decide:


Since indoor parking lots can be expanded vertically, the number of parking spaces that you can offer to your customers is limitless in essence. And because you’ll take the time to develop the land, design the space, and construct the building, you can charge a much higher rate per parking space.


The rates in most outdoor parking lots are relatively cheaper when compared to indoor lots because there is very little to no coverage for the cars. And because it’s quite impossible to increase your parking spaces vertically unless you’re going to construct a building or expand your lot, your profitability will be fixed.

4. Location

Both kinds of parking lots will be affected by location, which means it’s also an important factor that you need to consider. For instance, if you can buy a piece of land near a commercial space that many people go to, you’ll have a higher chance of doing successful business than if you were to open your parking lot in the middle of nowhere. Here’s how they compare to one another:


Indoor parking lots are perfect for places that experience temperamental conditions. This is because customers will want their cars safe in case of heavy rain or snowfall, hail, intense summer heat. Plus, being indoors makes it easier for customers to access their cars if and when they need to use them.


On the other hand, outdoor parking lots are great for places that have much calmer weather. Customers won’t be discouraged to park in an open lot, even if there aren’t any roofs over their cars, simply because their weather isn’t showing a cause for concern.

At the end of the day, you’ll end up with a passive income stream no matter what option you choose.

Just make sure that you take all the different factors as well as the pros and cons into account before deciding so that you won’t come to regret your choices later on.

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