Believe it or not, car washes have been around since before the mass production of cars, and there’s no reason to think that they’ll go away anytime soon.
As more people buy more cars and the need for affordable cleaning continues to grow, the demand for car washes will continue to grow. This makes owning a car wash a potentially excellent investment opportunity.
Of course, not every car wash comes with the same return on investment potential; consider these factors when looking to purchase a car wash.
The initial financial investments of starting and operating your own commercial car wash are hefty. In addition to buying the land, it may cost thousands to:
While some individuals do this themselves with great success, many choose to purchase their first car wash as an income-producing property rather than starting an actual business venture. (In other words, they make a commercial real estate purchase.)
Commercial real estate for sale often can be purchased at lower prices when viewed as an investment rather than a primary business venture due to lower overhead costs such as wages paid per hour.
Unfortunately, there’s much more to car wash ownership than just washing cars. You must take into account the seasonality of your business, its management needs, its funding, and return potential.
Should you manage to conquer these setup obstacles, then you’ll likely set yourself up for a profitable business venture: Car washes can clear anywhere from $50,000 to $500,000 a year in profits.
The riskiest part of establishing a car wash business, generally speaking, is the debt load. You’re not likely to experience immediate profitability upon your purchase, and this needs to be accounted for in your business plan.
You could have all your other costs figured out and have most of your money set aside, but what happens if the wrong type of customer has too much to drink in the parking lot one night and decides to smash their rental car into your machinery?
The hope with any commercial real estate for sale you buy is that its income is enough for you to not only pay off those debts and build your business without outside assistance but also to cover any unexpected financial costs and repairs that come up along the way.
You also need a sound financial strategy in place to prevent the business from going into even more debt during periods of lower profits. This is where assembling the right team comes into play.
So you’ve balanced the risks, weighed the pros and cons, calculated the funding, and are ready to pull the trigger on owning a car wash.
But before you do that, some final things to consider include:
You’ll also need to ensure you require the right licensing and permits before you begin.
A general rule of thumb is that around 1% of the business’s price tag needs to be allocated for maintenance costs.
There are many factors, however, that play into how much maintenance is needed, including the size of the building, natural wear and tear, its geographic location, and more.
Other maintenance costs specific to car washes include:
Make sure to do your research before purchasing a car wash for sale and deciding on your maintenance budget.
As a property owner and/or business manager, you should always reconcile with yourself the fact that you don’t know everything.
Knowing what you don’t know will not only help keep your property profitable, but it will also help you build the proper team and withstand the rainy days when they inevitably arrive.
Never be afraid to ask for help, either: Sometimes, all it takes is the right consultation with the right professional to swing things back in your favor.
Do your research, stay diligent, and happy investing.
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