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Lease or Own? Pros and Cons

Joe Marconi

By Joe Marconi
in Running The Shop

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Jerrys Auto Center Apprentice

Jerrys Auto Center

Posted
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“The moneys in the dirt!”… A comment that been made to me numerous times… And Yes it is!!

I purchased my property 1998… 

1) Certain months when I couldn’t afford to pay ME rent… I didn’t throw ME out!

2) My commercial property is my main and largest  retirement asset, I’m 66 now.

3) I did, what I did, when I wanted to with the property. 

4) In the 22+ years MY repair shop has paid ME just about $1.5M in rental income. MY Used car lot has paid ME just about $1M in rental income. 

To me…

The moneys definitely in the dirt!! 

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NATURE Explorer

NATURE

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10 hours ago, xrac said:

That is dirt cheap!

I got lucky and purchased the property in March of 2019, right before the craziness.  After down payment, the loan amount was right around $350,000 for a 20 year.  It's just a 3 bay shop but it used to be a used car lot, so plenty of parking and one of the best locations in the city.  Of course when going this route you have to take taxes and down payment($30,000) into consideration, so I have to add another $700.00 in property tax a month to that $3000 mortgage payment but still it was an easy decision.

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TheTrustedMechanic Community Regular

TheTrustedMechanic

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I regrettably still rent but with a fantastic landlord.  Property in my area has always been crazy expensive and unless I want to move across town and out of town, there is nothing that is zoned industrial (required for auto repair where I am).  With that said, I am always wanting to buy because of the dozen or so repair shops that have gone up for sale over the last 20 years, I know of only two that actually sold and both had property.  The rest were buying a job basically where they had no property, just the business, equipment and customer database.  So, I know I own a job, not a business and I know that my retirement is not very secure, but it is what it is because of where I am.  But it makes me a good living and I guess I will make the best of it and try to position myself for purchase should something come up.

But, buy is the only way to go after you are established.  When you're starting out, renting is probably the best/cheapest way to go. 

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TheTrustedMechanic Community Regular

TheTrustedMechanic

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I am located in a building that houses 5, soon to be 4 other businesses and my landlord bought the building about 4 years ago to base their two businesses in, so buying the building will not likely be available for purchase.  I am located in Traverse City, MI.  My rent for a 2000 sq. ft. space is only $1058/mo. so any purchase will be far more expensive on a monthly basis but still my desire.

 

 

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  • Have you checked out Joe's Latest Blog?

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      I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
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      Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
      Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for.
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