Should You Buy or Rent a Shop? 

Feels like every monday is my birthday.

Honestly, judging by your previous video, clearly buying looks like the best option.

Best thing about this video; being mindfull about your daughter and the importance to stay put for the time being. That, Eric, amongst other things tells a lot about you.

I own my property for a long time now and it’s worth many times more than I paid for it. I finished paying the mortgage 19 years ago and I haven’t paid any rent or mortgage since then. For myself it was the best thing and every year the property keeps going up in value.

When buying commercial property, hiring a real estate attorney is recommended.

Owning a property is always better ! It goes up in value !

I have done both owning and renting. You hit the nail on the head for both. You are absolutely correct, research, research and when you think you have done enough, do more research! Renting is typically the best scenario for the majority of people.

So happy for you Eric! Things happen for a reason and we are all excited to see the new place!

I'm just glad you are upsizing. You are a savvy businessman Eric! Looking forward to many years of watching your success.

Really do enjoy your honest answers and positivity.

My favorite videos are when you were setting this shop up. Can't wait for the next one!!!

Got to get up pretty early to catch ETCG by surprise. Kudos to you for your foresight and good planning. Well Done!

Buy (not this one of course). Caveat: I guess my perspective is that despite all the problems it can be a good store of value. You ain't gonna live forever. Something left over for the kids once you pass is kinda nice.

Great points on why you didn’t buy the property Eric! So many things to consider when making the decision. I hope things go smoothly during the move!

Great advice. for anybody wanting to have their own business. Food for thought.

Super happy for you Eric!

What a great point of view! Thanks so much for this. I'm currently wrenching 8-5 at a dealer and renting a 2 bay shop for my hobby/side jobs during after hours and weekend.

Good luck my brother. And good looking out for your daughter she will appreciate you for that . Best of luck at the new place ..

All good points to consider, Eric. Potential big differences between residential and business properties.

Good advice! Always do your homework before purchasing property. Many decades ago, our family plumbing, hvac and excavating business would rent space and focused on the business field of our expertise. Profits can be eaten up by diverting your attention in areas foreign to your core business much like commercial property ownership/management. Good Luck!

If a bank is lending you money to purchase a commercial property they'll likely require you to get an environmental site assessment, especially if the site was an auto repair shop, gas station or nuclear titty bar. Might have some additional testing to do depending on what activities took place on the property. Either way, you're paying about $3k minimum to have the assessment. If you ever see a corner property that has been vacant for ages, it likely needs an expensive cleanup, likely due to underground fuel tanks or some major spill occurred there. Eventually, as surrounding sites become more expensive and scarce, it'll be worthwhile for someone to pay to clean up the property and re-develop it.

Great to hear you're going to a better situation! Been watching you for years. :)

Great advice. You have a great positive attitude.

Great video Eric as always.As far as renting or owning i think it depends on the person.I have never owned a shop always have worked for shops and sometimes i would look at the owners face and say thank goodness i'm not in his shoes because of repairs or what ever else.Good luck Eric on what ever you decide can't wait to see the new shop.Have the rest of a great L.D. weekend everyone.

Great video, chock full of experience. Thank you for sharing!

Lots of good points Eric. Thanks!

Very cogent arguments, revealing depth of experience.

Enough said I think you covered it all, commercial real estate can be tricky especially when you have property zoned for so many different purposes do dealing with collection of rent is a whole other issue... best of luck you were definitely prepared for this a few years ago. BEST of luck, look forward to new content.

Eric We wish you the best of luck 👍🙏❤. The way you brake down things and explain them is awesome. I've done most of my repairs on my cars off of RU-vid and thanks to you ,I've been able to keep my car on the road . I'm glad to hear you say that your plans revolve around what's best for your daughter. BEST DAD AWARD-GOES TOO--ETCG.!!!!! MUCH LOVE AND RESPECT from "Skagit valley "Washington. Thank-you for all your hard work. I feel like Daniel son,I have much to learn from you Mr.Miyagi. "Skagit valley ".Washington.

hope it will work as you planed and the video's keep coming and never stops😁

Great Planning Eric!

You're welcome, you taught me how to fix a lot of things on the Honda Accord and my Hilux, will never forget the knowledge you teach, has saved me probably as much as 20 grand doing repairs myself with your guidance, Thankyou mate.

Awesome to hear that there are bigger and better things happening to ETCG!

WOW you have done your homework on what to do... you are super smart i am so very proud of you Mr. Eric... Another great video... i need to help you move out just say when...

I really like Eric's style; backup plans for his backup plans.

We all love the honesty and integrity of your channel Eric. You are good dude my friend. You and your family deserve all the best. 🙏

A great businessman and a great dad, you. Thank you for all the info, as a new property buyer (mortgaged my 1st house 2 years ago, I try to stay away from "own" or anything of the like) and found some of this very informative, and am learning more and more in this country (that I love) 'ownership' a lot of times in a lot of things, hugely property, has an asterix that isn't conspicuous. I have titles to my old jeep and 91 obs chevy, I know (or hope) atleast the title says I own them outright. The rest of what I have is debatable lol.

Sounds like things are working out so far... awesome ... peace

Very smart, Eric. Always research to find out what is best for your situation.

Very nice points, I was considering a place for auto paint shop.

Im looking forward to seeing the new shop.

Great video! In the process of building my own shop on my land at the moment

Thanks for the info!

Never thought about all the problems of owning a commercial property. Thanks for the infos.

Good info. Never thought of all that about investigating he area in which you plan to purchase.

It's always good to plan ahead, indeed. I hope you'll be able to realize your plans and future business develpments!

all I can say is GG for planning ahead. can't wait to see what is next.

THANK YOU BRO.............. Great advise for all of us !!!!!!!!

That's some good perspective. Never thought of all that. Makes sense.

Lots of good info there, man. Thank you!

I think you're spot on with the options - lease seems the best assurance without having to worry too much about environmental concerns. Good that you are thinking long term - in 20 years with EV's the garage industry may be looking a lot different to today. There may be tax writeoff issues which point you in the right direction.

Staying tuned for those bigger better things that are coming to ETCG1 ! You're an amazing guy Eric. Looking forward to March of 2022 (which is how I wound up back here), I wish I could have been the lucky individual who's claiming all that free equipment you're giving away. Oh man, I wish I wish I wish, but then again, I'm not sure I have that much strength left in my old body... that is, enough strength to utilize all that equipment for what it's worth. I have been contemplating having a lift (my back and hips are tired of climbing up and down from the concrete), but I don't really have enough business to warrant the expense yet. Crap man, I don't even have the expertise... I'm still watching ETCG1 learning :P God Bless Sir.

Thank You Eric! 👍😄

Great Video. Thank You. I have been Subscribed to you for a few years. I work on my own Honda's and more. Peace Bro!

Eric you ar cool guy. i rember when you started youtube way back then. you helped me repair alotta cars just by looking at your videos. keep up the good works ma brudda. i wish great success.

I appreciate the pros and cons of both owning and renting. I can echo what you say in this video, do your research and find out what works best for your needs.

thanks for the video

A little over three years ago I found some of your videos which helped me stumble my way through a few much-needed repairs on my 1994 Acura Legend. I was in way over my head with very little in the way of automotive experience but definitely could not afford the labor costs. I could barely afford the new parts. I kept watching your videos and ended up landing a job as an entry-level lube tech at a dealership. I'm now a B-level tech with a few ASE certifications under my belt. I consider you to be one of my mentors. I am grateful and happy for you and your continuing success. Congratulations on your new, future shop!

well stated! thanks Eric the car guy!!!

Eric you are so spot on !! My buddy was in your same boat "new owner wants space" 14 years ago the house next door from his home burnt down that landlord decided to pocket the money and not rebuild my friend bought the land had soil testing done and wow $$$ huge costs in clean up that being said present asking to move his business he has decided to build a shop next-door to his home getting it zoned commercial was his biggest hurdle now covid supply issues shop is 70% complete hope is Jan 30th he explained how his rent vs mortgage is dubble but he choose a 15 year mortgage didn't want 25-30 year's he is very nervous because if he fails he has to live next door to his failure ....

Love your videos, hope everything works out

EPA thing you talked about is very true. I was in the gas station business. They come and test the soil. If it shows contamination is very expensive to fix. Too much than they shut down the station and pull out the tanks. it’s huge headache station owners generally get environmental insurance which is pricey

Thank you very helpful!

Seriously, this video should be called "Commercial Property, Ownership versus Leasing, Class 101". A must watch video for small business owners.

I've learned a lot from you over the years, not just about cars. I expect your new spot will work out great. Just some momentary growing pains.

Yes, I hope bigger and better things are coming, Eric. Godspeed!

Another great informative video

I had a machine shop. I'm retired now. What I always tried to do is buy at least twice as much space and lease out half of it. Just my 2 cents.

G'day Eric, Kevin here from Australia. Great video and very good sound information. Anyhoo stay safe and healthy man. ✌🏻 Peace

Having signed many leases, any Environmental problems are also the Lesee's problems if it's in the lease. The whole thing usually ends up in court unfortunately, especially in the USA.

Love your videos Eric

Excellent video

Great video 👍If you own your shop you could rent it back to yourself but that's if you own it out right.

In my opinion, renting or owning depends. There are pros and cons to them both and should be taken into consideration.

Could you do a video with tips on finding shop space for the DIYer who only needs 1000 sq ft or so?

Glad I watched this

Thanks Eric!

Excellent advice about researching well before you buy. In south Florida where I live, you might get a great deal on a piece of land, only to find out 80% of it is wetlands and you can't build on that part of the land. Same with the EPA issues, there are a bunch of superfund sites down here, mostly related to fertilizer production. But also near my house, maybe 15 or so miles away, there used to be an oil and battery recycling place. Got sold as commercial property only to find out that everything they could have done wrong, they did. And that stuff isn't limited to the obvious things you'd think would create those issues. There was a large call center near me that had these massive turbine generators to maintain business operations. The tanks for the Jet-A were installed in 1975, around 2000 come to find out they'd been leaking for years, was a huge mess to clean up. Funny side note on that, every time they fired those bad boys up they had to let the police dispatcher know in advance. Because it sounded like you were at an airport as they got started, and people would light up the switchboard to complain about it, my father always got a kick out of that.

GREAT Advice

It really comes down to what will work for you both financially and time wise - ensure that you will have a shop for whatever period of time you plan on continuing to twist wrenches. Ownership helps control overall cost of use however it also brings with it all the things you mentioned in terms of accountabilities. Renting does limit your accountabilities, assuming you have the right lease and all requisite control features built in, however you'll be at the mercy of the landlord on a number of items including future lease costs and whether or not the landlord takes care of stuff that happens in a timely fashion. You could just as easily be displaced with a lease if the landlord doesn't take care of the property and fulfill the responsibilities of a responsible owner. Seems like you have made up your mind, and that's good. You're looking ahead. Best advice, get a good attorney to make sure your new lease provides what you need.

I'm hoping to see all transpire well for you.

you gave a LOT of solid advice for folks

Hi Eric we miss you. Hoping things are working out. One of the greatest car guys .🔧🛠⚒👍

Good luck with your endeavors.

Good video Eric ,

Im in a very similar situation Eric. I used to own a home until I sold due to all the bullet points you mentioned. I am currently renting a home but now my landlord wants to sell. Luckily he offered me month to month until Im all moved out. Two weeks after I got the news, I found a single family home built in 2020 up for rent, for which the landlord and I actually do the same type of work (diesel tech for the Army). Unfortunately it's 300 sq ft less than my current residence, and doesnt have a garage 😢 but it does have a freshly built 35x30 storage shed with shelving and plenty of space 😊😊😊. What a breath of fresh air to know that an inspirational individual like yourself has gone through a similar trial. Ive definitely had to plan ahead and save more money than I usually do.

Agreed with previous owner stuff. Our town wanted to build a new fire house station, they bought a corner lot in town and the back half was an old dry cleaning store that had operated for 40 years at that location. City had to dig down 10 or 20 feet to get to good soil, pay to ship that soil put in a toxic landfill place, then let it air out for quite a while and then pay to have new full trucked in. Yep, renting has it perks 🧐 Back corner of firehouse is the parking lot now 🙈

Great video 👍

Well planed.

Long ass comment. I just read you don't like Emails, so here goes... First off, I hope this comment finds you well. I love your videos.I'm a 67-year-old retired transmission shop owner in Draper, Utah which is a suburb of Salt Lake City. I agree with 99% of the videos you put out. I like your videos so much that I watch them all the time. (I have a lot of time on my hands.) However, I would like to input my opinion. I've been as well as a transmission shop owner, but also a renter, a commercial real estate landlord. I agree with you fully on owning is better than renting. To me, ownership is your retirement and your family legacy. This is a story somewhere between thinking ahead and sheer luck. Here's my story... At the age of 60, (2015)I sold my business to a nearby local multi-shop transmission shop owner who had 5 shops in the greater Salt Lake area for $330K. That wasn't enough money to retire on. However, I leased them the shop for $11K/mo. We paid the property tax because I didn't want to fall into that trap of having 2 or 3 years of back taxes being assessed on ME. I affectionately called it "double-net" He signed a 10-year lease. In the past 3 years of my business, we had total revenue of $1.2M. Our shop location was killer as well as my own self-managed Google AdWords campaign. Going back 2 years earlier, I had approached the landlord about buying the building and property instead of renewing the lease. I asked for a 10-year owner-financed mortgage for $840K. That was in 2013. He went for it. Although I had a 10-lease, my mistake was in not doing due diligence in checking these guys out. My great mistake was not checking out their BBB rating beforehand. Long story made short, they skipped out after only 5 years and took every piece of shop equipment in the building PLUS leaving 29 abandoned vehicles in the back parking lot. The reason they skipped out is that sales had fallen to $400K/yr. which now made rent a staggering 33% of income! No mystery why they failed to me. They were consistently behind in their rent, sometimes 2 and 3 months behind. ($33K) After they skipped out in 2020, we put the place up for sale because all we had was a barren building and NO "business with shop equipment" to sell. On the tax records, the place was assessed as being worth $1.1M. That was highly undervalued in my mind. I was asking $3.2M. Two weeks after I listed the property on LoopNet.com, I had a buyer at $2.3M. LoopNet is the "Google" of commercial property buying, selling, or leasing commercial property. The moral to this long-winded story is selling your automotive business is not enough for retirement. Only selling a prime piece of real estate is. I bought the place for $840K on a 10-year owner-financed mortgage in 2013 and sold it 7 years later in 2020 for $2.3M. After all the "fees" and paying of the mortgage, we only cleared $1.9M. Now THAT'S ENOUGH MONEY TO RETIRE ON. When you're getting up in years, somehow, somehow, figure out a way for owner-financed buying and not a mortgage company. Think retirement.

Your point about regs out in the country is well taken. Just because you are not "in the city" does not mean that the zoning/permit folks are any less corrupt in trying to help themselves to your wallet. My hobby shop (not for profit) build opened my eyes to the dirtyness.

Many years ago, my dad had a problem with contaminated soil. He held onto a vacant building for 30 or 40 years until someone bought it for a song. My folks were very relieved that day.

Well put 👌🏻

My Birthday is on a Monday this year!!!! WOO HOOO

Eric: "Burning the candle at both ends would be a bit of an understatement" Me: "More like lighting a fuse at both ends" Me also: "why do I always feel hungry for sweets after these videos?"

Best of luck!

Not moving when your kids are in high school is an Ace decision. Keeping your kids grounded as they become adults is hard enough. I commend you sir. 😎👍🍁

I ran a backyard machine shop for 25 years. I just sold my place last March and did very well on it. Now I'm retired living in the mountains in Montana.

Also buying a former shop you have to think about or find out if it has buried fuel tanks. In NC where I looked at one, it still had tanks in the ground so no conventional financing and future problems.

I'm still in my (latelate) 20s, but I hope one day I can manage major life changes and challenges as well you seem to have.