Self serve carwash increase rent,worth staying or buying it?

[Wasking]

Been running a self serve car wash for 3 years landlord just informed mes me that my lease is up and is increasing $2k,currently paying $2200.
Is that something worth staying!
Revenue$119k
Expenses $50k
Old rent$2200 month
New rent$4200 new

 

[Randy]

I hate to see this, It looks like you might end up working for the landlord for free. That's thee problem with leases, your at the mercy of someone else. I have a friend in California that had that problem the landlords thought that they were going to get a car wash for by raising the lease to the point that it was unprofitable. Little did they know all they owned was the building. When the car wash left they took everything, the only thing left was an empty shell.

 

[Earl Weiss]

Ie landlords thought that they were going to get a car wash for by raising the lease to the point that it was unprofitable. Little did they know all they owned was the building. When the car wash left they took everything, the only thing left was an empty shell.

The story is not complete. Is it a gross or net lease? Meaning is the rent supposed to include real estate taxes or are those separate? When was the rent last increased. Around here a tax bill for a decent size business property is $50K. Some recent Tunnel Builds are at $200K

 

[Greg Pack]

Ask yourself Is it worth 20K/year to have to hassle with the wash? I doubt it, and that's roughly what you're looking at.

Good luck, tough situation.

 

[Wasking]

The rent does not include taxes.
Rent increases 5% a year with the lease being at the last three months from the last agreement nos is going to increase $2000 plus not including real estate taxes.
I understand increases every year,that comes with being a tenant but if that’s going to take at 55% of the net profit is it even worth it.
How would you go bout negotiating that?is it maybe worth buying so it doesn’t feel like is a waste?
Any thoughts would be much appreciated.

Thanks

 

[Waxman]

write up a proposal for purchasing the wash and present it to owner. do your research to come up with a fair price. be respectful, be professional and be proactive.

 

[Earl Weiss]

The rent does not include taxes.
Rent increases 5% a year with the lease being at the last three months from the last agreement nos is going to increase $2000 plus not including real estate taxes.
I understand increases every year,that comes with being a tenant but if that’s going to take at 55% of the net profit is it even worth it.
How would you go bout negotiating that?is it maybe worth buying so it doesn’t feel like is a waste?
Any thoughts would be much appreciated.

Thanks

So, you pay the taxes as well and will also need to absorb any tax increases? What sort of increases have you been experiencing so far?

 

[Axxlrod]

Leases can definitely work if structured fairly and properly; this one doesn't sound like that.

 

[edredtop]

Been running a self serve car wash for 3 years landlord just informed mes me that my lease is up and is increasing $2k,currently paying $2200.
Is that something worth staying!
Revenue$119k
Expenses $50k
Old rent$2200 month
New rent$4200 new

Sounds like your landlord might have watched a few "Look at All of My Cashy Cash" YouTube videos and thinks you're hiding piles of money like Walter White.
Thing is, Walter White wasn't making his money off of the car wash business.
The real questions are:
* Can I negotiate a better price with some good ol' fashioned diplomacy?
* Can I increase my revenue by $26K or more annually by adding improvements and/or cutting costs?
* Is my heart in this with these circumstances?