Thinking about a business

[tcianci]

I'm trying to gauge the interest in a rental company that rents garage bays. Although there's nothing new about renting bays, my thoughts are to make this rental property specific to auto enthusiasts, not businesses.

My idea is to either construct or renovate an existing building into multiple bays and rent them out. The rent would cover heat, hot water, compressed air and I'm toying with the option of rent to own lifts. The building would be styled more towards a barn/ rural style building with landscaping and possibly even a common space for grilling/ firepit time.

I know there have been multiple threads about renting out equipped garages on an hourly basis and some of these have even popped up now and then but the liability coupled with human nature seem to doom these ventures from the start. I hope, by having all the typical regulations of a lease, that there would be some "buy in" on the part of the tenants which would be reflected in how the property is treated.

The bays would provide storage and wrenching space for guys with hot rods and specialty cars. A fenced enclosure and 24/7 security hopefully would be a draw.

I would appreciate your thoughts on this...tear it apart, or give it a thumbs up, etc. Either way your input would be very helpful.

 

[JPrato]

It sounds like a neat idea but I think you have already uncovered the weak links in the chain. Liability would be my main concern. Sooner or later somebody is going to catch a car on fire and then there is trouble. My neighbor just burned his whole house down while welding on his demolition derby car in his garage. S... happens.

Many years ago a egg farmer rented out is old cinder block wall hen houses for guys to work on cars. Well, it suppose to be for storage but there were quite a few shops in operation including mine. One night some guys were sandblasting on a gas tank (there goes human nature) and you guessed it, get out the marshmallows. The roof was wood and it just burned from one end to the other.

What happened was as people made insurance claims the insurance companies then turned around as sued the farmer. It wasn't pretty. Everybody signed releases when they rented but I guess they were not worth the paper they were written on.

Maybe if the building was all steel and concrete it could minimize the fire risk but I would still think you still might have exposure by people getting hurt. I don't know, a lawyer could answer that question. Could he draw up a contract that isolates you from your tenant's actions?

The other factor is people. I like to think people are decent and respect things but after just getting out of house rental business there is a percentage that in the end, just don't give a **** about your property. It's kind of sad.

Sorry to sound so negative but I think it would be difficult to set a business like this up and have it be profitable and not ruin you if things went bad.

 

[jd_1138]

There might be some insurance you could buy which would protect you from the fire starting knuckleheads and from people slipping on grease, etc.. Also, make sure the releases are iron clad.

And be sure to incorporate it, to limit your personal liability.

 

[p_mori7]

We had a place like that near my house many years ago.

It did not last long.

 

[A_Pmech]

The question you have to answer:

Why would someone who has the money to "buy in" to your rental not just spend that money on equipping his garage with a lift and air compressor?

 

[kelpaso1]

I think a storage facility would be a far safer business liability wise. My idea would be to own/rent a large lot or warehouse and put a bunch 20 foot storage containers on the land or in the warehouse. Not much liability, and no one "working" on something. Also would be good for RV storage. Might not make a million but you would have a steady income as most storage places don't have much vacancy, at least here. And when somebody misses a month or two payments you kick them out and re-rent the next day.

EDIT: And easy to maintain, no logistics like scheduling, supervising, maintenance, and most important, hardly no overhead (except for the rent and containers)

 

[ich_liebe_meine_arbeit]

Not sure if this is in the same realm as what you are thinking, but if you google DIY Auto Repair in Olathe KS. They have been open for a couple if years now and pretty successful from what I have heard.

 

[CNGsaves]

Might work for just basic SECURE storm-proof storage of high end vehicles like Porsche, Lambo, Corvette, etc. Customer could pay more for their own stall, or less if agreed to share stall on a 4 post lift. These high-end customers might also want webview ability to check on their ride.

I've heard of concrete storage facilities that were super secure so owners felt safe in renting spot for their "baby" vehicle. Of course these had pretty healthy monthly rental rates. Often these vehicles are rarely used so it's pretty long-term steady money for little in/out traffic that needs monitored.

I'd sure recommend you survey a sample of high-end potential customers first to gauge the demand. Good luck.

 

[zkling]

I think it would be neat, but the practacility of it may be a different matter.

The question you have to answer:

Why would someone who has the money to "buy in" to your rental not just spend that money on equipping his garage with a lift and air compressor?

Although the existing places that do this type of setup seem to cater to urbanites that have no garage or the space avaiable.

 

[finn]

There is a reason that storage units don't have electrical outlets, & it isn't the cost of electricity.

 

[pi_guy]

We have an example of what your thinking of doing here on LI. But a single person rents out bay space to racers. He is always there 7:30 to 7pm and you can only work on vehicle when he is there. The problem with giving people keys is who is watching the other cars in the bays. Also you get access to machine shop and welder, but would you want to just let somebody use your 750 dollar boring setup and tweak it.
There is also storage of rare vehicles and times they are on the shop floor being prepped for an event. So you really need to control who comes in and who knows about it.
The real issue you are going to have is getting insurance, nobody going to insure you if you tell them the truth. In there eyes it is an incident waiting to happen. The shop I am talking about the owner of the building is a car collector and has his cars prepped in this shop on the same premises and works the insurance through his main business <computers>. It is a neat idea but you are putting your self over a very sharp pointed stick that will get rammed home at the worst time possible.

 

[jd_1138]

I wonder about the legalities of having each of the tenants sign a contract to purchase part of the building with a monthly payment. Would that limit your liability? That might turn them from being renters with a bunch of legal obligations on your part to "owners" whereby you are off the hook for what they do?

 

[tcianci]

The question you have to answer:

Why would someone who has the money to "buy in" to your rental not just spend that money on equipping his garage with a lift and air compressor?

Of course if someone had a garage and the garage was big enough and the guy could afford the lift and the garage was secure, he wouldn't need to rent space at all

 

[tcianci]

I wonder about the legalities of having each of the tenants sign a contract to purchase part of the building with a monthly payment. Would that limit your liability? That might turn them from being renters with a bunch of legal obligations on your part to "owners" whereby you are off the hook for what they do?

I'm sorry if I gave the impression that the users would be buying part of the building. They would be tenants.

 

[tcianci]

I need clarification on the liability stuff. How would this be different from any other multi tenant commercial building? In my town, there's a very large multi bay building that leases bays to several businesses and most all of them are automotive repair. They seem to work out just fine. It's been there for decades.

 

[pi_guy]

One customers are not allowed in garage area do to insurance regulations.
2 you are allowing non professionals to play with hazardous material, safety clean, welders, cutting tools and grinders on something that should only be worked on by a certified tech.
I tried to get insurance to move into a small garage space and told the insurance agent I did light electronic fabrication,<wiring harnesses> did not mention heli-arc welding or race cars. Would not issue a policy due to the hazardous fumes given off from soldering.

 

[Jere]

If you are doing this in an area of the country that doesn't have houses with garages, and you get the legal bs squared away I would think this could work. Now if you are in an area that like where I live 50 percent of houses have garages and there wouldn't be much of a draw business wise. Now down around NC where mostly houses have car ports or nothing this could be really big with enough advertising.

 

[BIG-BRO]

I need clarification on the liability stuff. How would this be different from any other multi tenant commercial building? In my town, there's a very large multi bay building that leases bays to several businesses and most all of them are automotive repair. They seem to work out just fine. It's been there for decades.

In that case, each of those tenants is a business in itself and each of them has their own liability insurance.

 

[sberry]

Lots of potential for pains in the ****. I have seen this and its a hi risk venture from a biz standpoint and they had fairly deep pockets.

 

[LEVE]

Take a look at the "Garage Town" Business Model. They seem to be successful, however they do sell space in a building, they do not rent space.

Garage Town

 

[hbabler]

If you are smart with your fire protection you can eliminate a lot of the risks associated with fires.

 

[allinon72]

Don't ever ask a forum their opinion about starting a business. They will all tell you it will fail, too much liability, etc. The truth is starting a business without risk is impossible. You just have to have a plan for everything.

 

[tcianci]

I have to chuckle at myself over starting this thread. I read on here much more than I comment because when you do READ, you quickly realize that most of the posters DON'T READ and then make stupid uninformed comments. I was looking for input about the business concept and I ended up with a bunch of shoot from the hip ramblings about insurance liability. Of course there's insurance liability and if there weren't ways to properly insure in legally protect yourself none of these "experts" would have jobs.

Mods, please close the thread. I got caught in my own trap.

 

[tcianci]

don't ever ask a forum their opinion about starting a business. They will all tell you it will fail, too much liability, etc. The truth is starting a business without risk is impossible. You just have to have a plan for everything.

Amen!

 

[allinon72]

Two words for the negative Nancys: UMBRELLA POLICY

 

[pi_guy]

I read on here much more than I comment because when you do READ, you quickly realize that most of the posters DON'T READ and then make stupid uninformed comments..

How many shops have you been involved with that rent space?
It is funny you ask about a business concept and when you start to read things you do not want to hear about you want to shut down the thread.

Why do you bother to ask us to comment or in your words "Tear it apart" if we point out the biggest issue you will run into. You have a hissy fit.

One other question in your phone list of potential customers how many own cars over $100k?

 

[Uldlose]

Been there done that. Absolute failure for my partners. I only agreed to get in with them due to ROI couldn't pass up on the terms. I was in for a year and set up a llc to limit any exposure to lawsuits in any prior and future dealings.

The one partner was a ASE "CERTIFIED" Master Technician. Even though the one partner was a insurance broker they ended up losing everything. The resulting fire from a torch that was pointed to the floor to check the progress of the heating of a frozen nut, which ignited a trail of gasoline taking out the whole warehouse. The insurance company found two loop holes in the coverage even though said partner reviewed the coverages and requirements assured us that everything will be covered for whatever can possibly happen in a Auto Repair Facility. No installed fire suppression system did them in. All because it was not necessary to obtain the C.O. The second loop hole was a ASE Certified Technician was to be on staff and present at all times. ASE partner went on vacation and they did not hire another guy to be a stand in while he was away. All the tenants and customers that lost cars sued and won something. The LLC basically went bankrupt they had enough in the bank to cover some of the lawsuits and the rest was in equipment sales and the property sale and they where able to walk away.

They where in operation for 1 year and 364 days. During that time they operated in the black with only two months being in the red. The month it opened and the month I left. We are still friends and they recovered new businesses where setup and operating.

I'm Not be any means trying to discourage any one from starting a business and advancing themselves. You have to take risks to reap rewards.
All I can say is read read and read insurance coverage and requirements and have a lawyer that specializes in business contracts to write tenant agreements and space and equipment leases.

 

[willtel]

There is a business like that near Atlanta that I used to be a member of. It worked out great for me as I had no garage and two cars I needed to store. They guys that started it up said the most difficult parts were dealing with city codes because they didn't know how to classify the business. The results were that they called it an auto repair business but there were a few restrictions on what could be done on site. After start up the city never bothered them again.

http://www.e3storage.com

 

[MikeYC]

I'm trying to gauge the interest in a rental company that rents garage bays. Although there's nothing new about renting bays, my thoughts are to make this rental property specific to auto enthusiasts, not businesses.

My idea is to either construct or renovate an existing building into multiple bays and rent them out. The rent would cover heat, hot water, compressed air and I'm toying with the option of rent to own lifts. The building would be styled more towards a barn/ rural style building with landscaping and possibly even a common space for grilling/ firepit time.

I know there have been multiple threads about renting out equipped garages on an hourly basis and some of these have even popped up now and then but the liability coupled with human nature seem to doom these ventures from the start. I hope, by having all the typical regulations of a lease, that there would be some "buy in" on the part of the tenants which would be reflected in how the property is treated.

The bays would provide storage and wrenching space for guys with hot rods and specialty cars. A fenced enclosure and 24/7 security hopefully would be a draw.

I would appreciate your thoughts on this...tear it apart, or give it a thumbs up, etc. Either way your input would be very helpful.

Go for it. Most military bases have a auto hobby shop you can model it after. Quantico has a huge one with two oil change only drive up ramps. 5.00 per hour for any lift/bay in the place and two ASE mechanics with a complete tool room and machine shop. BTW East coast Cianci here.

 

[Playwme]

How much do you think you can rent out a space for? The main problem is the initial outlay. You need a large building, in the right area, and then you need to keep it rented out. The right area often costs a lot, and then the cost for the customer gets to the point where they can put that money towards a property with their own garage where they have 24/7 access and freedom to do what they want.
The people without the equipment either can't afford high rental costs, or have the money but aren't the hands on types and just pay to get the work done when they need to.

 

[Notgrownup]

You would have to enforce Osha type rules on them, like fire cabinets and whatever may come either that ....you insurance agent might give you sound insight on that...just throwing that out ... Cover your *** with paper....you could talk to a safety consultant. If I lived in a cramped city dwelling and could afford it and it was a passion I might consider it.

 

[rancherbill]

Take a look at the "Garage Town" Business Model. They seem to be successful, however they do sell space in a building, they do not rent space.

Garage Town

I agree. There are three of this style places around here in the last two years.

People are willing to spend the money on the space and all the improvements to get their fantasy man cave.

 

[racerex]

What about just a car storage facility with a small shop for some customer work on the side. There is cool place near me...a very large climate controlled warehouse for long term and seasonal car storage...most are vintage muscle, with a few exotics and weekend warrior road racing cars mixed in....plus, one or two large motor coaches. The place is set up pretty well..cars are stored on 4 post lifts, etc. When it first opened up a few years ago, I wondered if it would survive.....it looks like it is. I believe the owner also buys and sells cars for his customers and himself on the side....plus some light resto and seasonal prep work. With a place like this, it's all about location. It's just 50 minutes out from NYC in the burbs, which translates into car guys with $'s and limited space to store their toys.

 

[tcianci]

Thankfully, several recent posters seem to have actually read my original post and have commented thoughtfully.
I visited the garage town website, this is essentially the same idea I have. And although it's nice to have an idea that no one else has thought of, in this case it's nicer to see that someone has already!

It seems like with all other aspects of real estate, it's still "location, location, location". Fortunately, in the suburban Boston, MA area, I have the location. There's literally thousands of guys around here with antique/classic/specialty cars. Our local cruise regularly draws about 2000 vehicles.
Of course there's much research to be done and the warning for me to "cover my *** in paper" couldn't be more true.
After looking at Garage Town, the idea of going condo is very appealing. Depending on the space available, even detached, landscaped condos are a possibility.

I suppose a little background is in order; right now I'm in the planning stages with a client who wanted to construct a rather large building on his residential property for his project cars. After some discussion, I have convinced him to scale the project back to a good sized addition to his existing oversized 1 car garage. The main reason was property value. Initially he thought his building would do wonders for his property value, but that's not the case. It's a total residential area and a 30 x 36 monstrosity looming in your back yard sort of sticks out like a sore thumb. While planning his project, I got the idea for this business venture

 

[stingry]

Here's a local business doing similar to what you are proposing
http://www.starherald.com/community...cle_ba5e5eb6-394a-595e-a5ca-3d395253b93c.html

A couple of comments on these:

I have no knowledge of how successful they have been. The developer and his son were very successful local businessmen at the time so the success of this business was secondary to them. Unfortunately, the father has since passed away. He and his son were huge car collectors and made several appearances on Barrett-Jackson.

Good Luck with your venture

Cheers
Steve

 

[buddyboy]

keep an open mind

if you're in it to offset some of your own costs of your hobby then you can be 'picky' with whom you let rent.

most businesses (small) need to adapt to their customer base, not the other way around.

if you're in it to make money then don't get your heart set on 'how it's supposed to be done' instead set your heart on doing whatever you need to do to pay the bills

good luck

 

[splonsgto]

I looked into this same idea a couple years ago! I think it is a great idea and in the right town it would work. At that time, I called a place in Florida that opened a "do it yourself"/auto repair garage just to get his opinion and see how it worked for him. He said the do it yourself part didn't take off as well as he thought it would so they turned the whole thing into a normal auto repair facility. He also said his main downfall was building a million dollar facility which drowns him with overhead.

Anyway, my idea was to have a smaller (10-12 bays) shop, rent a portion of it to certified technicians and the rest of it to do it yourselfers. I figured there are a lot of technicians that want to open their own shop but aren't ready or willing to jump into that venture. This way, they could have their own business and operate it out of your shop. The other thing that you can offer the do it yourselfers is programs like AllData, Identifix, Mitchell...etc...Programs like identifix would be a HUGE asset to the do it yourselfer.

Would you provide tools or would they provide them? Would you rent hourly? Daily? Weekly?

A great example of how to set this up is the auto hobby shops on military bases (Offutt Air force base in Omaha to be specific, I assume they are all about the same). I am not sure how they stand profit wise, but they have a very nice setup.

Also, I started asking the insurance question and the agent I spoke with said it SHOULDNT be that much different than a normal auto repair facility. That's as far as I got with that tho.

 

[tcianci]

Thanks for all the information! Just to be clear, there won't be any "businesses" running out of this property. Maybe the best way to describe it is Man Caves, just nor on your own property.

 

[Capt Chrysler]

We thought about doing the samething for about 30 minutes. If you want to do it, make them rental shops (like storage units) and let everyone do his thing in his space. Skip the shared stuff it will be problems in the end.

Capt. Chrysler

 

[chris142]

Every renter needs to carry liability insurance for starters.