Renting From The Competition

[brian lorenzo]

I have an opportunity to rent a 3rd location in a fairly busy area with a lot of potential. Problem is the current shop that is there owns the building and is moving 3 1/2 miles down the road will be the land lord. 

Is this a good idea? anyone else have this situation?

[HarrytheCarGeek]

If it is such a great location, why are they moving?

[brian lorenzo]

They out grew that place. It's 4 bay shop and they are katie bing to a 6 bay. 

[sheltrens]

Why are they allowing it to be competition. Why don't they rent the building to be something other than auto repair. I mergered with the shop a block down the street. My old building will never be an automotive shop again while I am alive. 

For you it sounds like a decent opportunity. 

[Wheelingauto]

Just keep in mind one day down the line they could shut you down. I have a good friend who is in the same situation, he rented a building from the competition, the lease finally ran out and as it did they declined extending it since they wanted to expand to that location. Luckily he negotiated a buy out per say and since he is near retirement it is his way out. Not the best scenario but it worked out for him. I would suggest if you proceed you go with this knowledge and structure a lease that favors the tenant with possible purchase terms spelled out down the road.