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Why are there suddenly so many car washes?

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Re: Why are there suddenly so many car washes?

#381

Post by dgoldstein0 »

hackerlight wrote: post #344
_heimdall wrote: post #250

Earlier quoted context omitted.

Thanks for all the details! Limiting a land value tax to densely populated areas is a great detail here. Sorry if I end up with a long list of follow-up questions here, this is really interesting. So my main concern related to destruction of natural land is that there is a disincentive to keep land natural if you have to pay the tax anyway. In dense areas that wouldn't be nearly as much of an issue, but it would stil…

> Is there a clear way to guard this system from building higher and higher economic centers Sorry, is this a bad thing? On the social side: In the current system, poor people are forced to live in ghettos and spend 2 hours a day on a round-trip commute. It's too expensive to live near their work. If we had a land tax, the rich enclaves near the city are now financially incentivized to open up their public schools an…

So in other words, issue some bonds to make future tax revenue pay for the current expenditures to build the infrastructure.

Re: Why are there suddenly so many car washes?

#382

Post by TacticalCoder »

dinp wrote: post #340
KingMachiavelli wrote: post #181

I really hate sounding like a broken record but this is just another instance of how low property taxes and the absence of land value taxes massively benefits low-value businesses. The real business of car washes is real estate, it's profitable enough to get 3-4x leverage with a low interest loan. TBH I think real estate used to have high information asymmetry between local residents and large investors; low property…

Somehow the idea of perpetually paying property taxes and land value taxes doesn't sound appealing to me, especially since businesses already pay taxes. I don't understand the argument of designing a system to hurt a specific business type such as low value businesses. If there's a loophole such as lack of sales tax for car washes, fix that, but let the playing field remain even. If desirable high value businesses ar…

> Somehow the idea of perpetually paying property taxes and land value taxes doesn't sound appealing to me, especially since businesses already pay taxes.

And it doesn't sound appealing to me, as an individual. I don't want to feel like a peasant constantly paying a tax to the monarch/state: so at very least the first property an individual owns should be tax free (not annual land value tax / property tax). I happen to live in a country where that's the case (but it's not the reason I moved there): no yearly property tax.

Re: Why are there suddenly so many car washes?

#383

Post by sydbarrett74 »

killingtime74 wrote: post #305
55555 wrote: post #292

Earlier quoted context omitted.

can you please elaborate on this? i don’t understand exactly. “The real business of car washes is real estate, it's profitable enough to get 3-4x leverage with a low interest loan”

The OP asserts (I agree) that the real profit from running a car wash is not the daily turnover of car washing, but the capital appreciation of the land the car wash sits on. The part about leverage assumes you are able to get a loan/mortgage to purchase the land the car wash sits on. In effect you are using the car wash as a reason to justify a mortgage you wouldn't otherwise be able to get for real estate speculati…

Correct. Just as the McDonald's Corporation is really in the real estate business. Burgers and fries are just their side line.

Re: Why are there suddenly so many car washes?

#384

Post by poulsbohemian »

helsinkiandrew wrote: post #346
KingMachiavelli wrote: post #181

I really hate sounding like a broken record but this is just another instance of how low property taxes and the absence of land value taxes massively benefits low-value businesses. The real business of car washes is real estate, it's profitable enough to get 3-4x leverage with a low interest loan. TBH I think real estate used to have high information asymmetry between local residents and large investors; low property…

> The real business of car washes is real estate. Is there any evidence of this? Companies like Mister Carwash lease nearly all their properties and when they purchase plots seem to alway try to do a sale and lease. Their latest results claim they run 436 sites and lease 427: https://ir.mistercarwash.com/news-events/press-releases/deta...

>The real business of car washes is real estate.

What I see in both car washes and the storage business suggested by one of the child posters is low-labor cash flow. I can't speak for all geographies, but locally what I observe is car washes are built on low-value land where these new heavily automated car washes have got to be a cash cow once they are paid off, especially with monthly subscriptions. I do unfortunately see a lot of storages built on what could be much higher value land, which does cause me to wonder what kind of financial engineering I'm not seeing on the surface.

Re: Why are there suddenly so many car washes?

#386

Post by Arainach »

dinp wrote: post #340
KingMachiavelli wrote: post #181

I really hate sounding like a broken record but this is just another instance of how low property taxes and the absence of land value taxes massively benefits low-value businesses. The real business of car washes is real estate, it's profitable enough to get 3-4x leverage with a low interest loan. TBH I think real estate used to have high information asymmetry between local residents and large investors; low property…

Somehow the idea of perpetually paying property taxes and land value taxes doesn't sound appealing to me, especially since businesses already pay taxes. I don't understand the argument of designing a system to hurt a specific business type such as low value businesses. If there's a loophole such as lack of sales tax for car washes, fix that, but let the playing field remain even. If desirable high value businesses ar…

>Somehow the idea of perpetually paying property taxes and land value taxes doesn't sound appealing to me

Eternal wealth to those lucky enough to have been born and bought in the past or born to families who bought in the past sounds plenty dystopian to me; pay up regularly or let someone else who will contribute to society step in.

Re: Why are there suddenly so many car washes?

#389

Post by hackerlight »

dgoldstein0 wrote: post #381
hackerlight wrote: post #344

Earlier quoted context omitted.

> Is there a clear way to guard this system from building higher and higher economic centers Sorry, is this a bad thing? On the social side: In the current system, poor people are forced to live in ghettos and spend 2 hours a day on a round-trip commute. It's too expensive to live near their work. If we had a land tax, the rich enclaves near the city are now financially incentivized to open up their public schools an…

So in other words, issue some bonds to make future tax revenue pay for the current expenditures to build the infrastructure.

The temporal misalignment might not be so bad. Residential dwelling construction and public infrastructure should both lag the actual tax revenue.

Re: Why are there suddenly so many car washes?

#390

Post by chrischen »

Arainach wrote: post #386
dinp wrote: post #340

Earlier quoted context omitted.

Somehow the idea of perpetually paying property taxes and land value taxes doesn't sound appealing to me, especially since businesses already pay taxes. I don't understand the argument of designing a system to hurt a specific business type such as low value businesses. If there's a loophole such as lack of sales tax for car washes, fix that, but let the playing field remain even. If desirable high value businesses ar…

>Somehow the idea of perpetually paying property taxes and land value taxes doesn't sound appealing to me Eternal wealth to those lucky enough to have been born and bought in the past or born to families who bought in the past sounds plenty dystopian to me; pay up regularly or let someone else who will contribute to society step in.

Exactly this. We all would love to be perpetual rent-seekers but it just doesn't work for a proper society. Not to mention land is a finite resource.
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