The key facts

  • In Moscow a garage costs on average 1.5–2 million rubles, rent brings in 15–35 thousand rubles, and the payback period is about seven years
  • The most expensive property found — two connected boxes with an area of 120 sq. m for 32 million rubles
  • When buying 'by membership book', the owner risks being left without compensation in the event of demolition; the 'garage amnesty' deadline will not be extended

How 'garage flipping' works

A passive income scheme is gaining momentum in Russia, which the Telegram channel Baza calls 'garage flipping': participants buy up garage boxes, put them in order and rent them out as studios, spaces for creative work and work, while the most enterprising resell them at several times the price. According to the journalists' calculations, in Moscow a garage costs on average 1.5–2 million rubles and brings the owner 15–35 thousand rubles, meaning the investment pays off in about seven years. Owners cite the low entry threshold and the ability to earn rental income without buying an apartment as the main advantages.

The extremes of the market

The most expensive garage the journalists found is also located in Moscow and costs 32 million rubles. It consists of two connected boxes with an area of 120 square meters, two toilets and a shower, with room for six cars: currently one half houses a detailing studio — a professional car cleaning and restoration salon — and the other serves as a warehouse. This example shows that properties for such a business can be considerably more expensive and more functional than a typical box, around which the average profitability estimate is built.

Risks and the legal backdrop

The scheme has a significant drawback that Baza points out: some owners sell boxes 'by membership book' — the buyer receives not ownership of the real estate but membership in a garage cooperative, and in the event of demolition of such a property may not receive compensation. This makes the question of legalizing garages especially relevant: the 'garage amnesty' is a government program that allows garages and the land beneath them to be legalized quickly and without excessive bureaucracy, however, as previously reported, its deadline in Russia will not be extended; the rules for granting the amnesty were previously explained in the State Duma. Thus, for those considering a garage as an investment, the legal status of the property is a key risk factor alongside profitability.