Home  >  Blog Posts & Articles  >  I Am Buying A Business: Should I Buy The Property As Well?

I am Buying A Business: Should I Buy The Property As Well?

Buying A Business Commercial Real Estate

When buying a business you may also have the option to buy the building it occupies.

Like everything else, there are advantages and disadvantages to owning commercial property.

In order to determine whether or not you should buy the property that comes with a business purchase, here are a few questions to ask yourself:

Can I afford it?`

Buying a business is a big financial undertaking. To add the property into the purchase price of the business you want to buy would mean increased expenses across the board. You’ll have higher monthly commitments, you’ll probably have different insurance requirements and you will be responsible for all the maintenance and up keep. All of these things cost money so if you are already stretching your finances to the max to buy the business itself, perhaps it isn’t the right time to buy the property as well. You may be able to negotiate a rent to own deal with the owner. Also consider telling the owner about your interest in buying the property but ask to re-visit the option down the road once you get settled and making a profit from the business you bought.

How will it benefit me and/or the business?

Just because you won’t be paying rent to someone else doesn’t necessarily mean buying a business and its property is the right choice. Ask yourself how owning the building will help you or your company. Will it help you to expand in the future? Will owning the building provide another source of revenue for you through rental income? After asking yourself questions like this you may find that it doesn’t even make sense to buy the building.

Do I NEED to own the building?

Some businesses need to drastically alter their commercial space to accommodate the company’s needs. Some landlords frown upon drastic makeovers because in the event that the tenant leaves that space probably won’t be attractive to every potential renter if it is highly customized to a specific type of business. At that point, the landlord would have to re-do the space in order to rent it. As a result, some landlords may charge you a higher rent to allow this.

If your business is one that needs to make drastic changes to the space it occupies then owning the property your business occupies may make sense. Now if you are buying a business that currently rents and has made changes to the space, you might use this as a bargaining tool with the landlord.

Am I ready to be a landlord too?

As I mentioned earlier, one potential benefit to buying the commercial space your business is in is that you may be able to generate rental income if the building has other tenants. The downside to this is that in addition to being a business owner, you now become a landlord too. You have to ask yourself if you are ready to be a landlord and take on the responsibilities that come along with that role. While more revenue may be coming in, rest assured it will going right back out at some point for repairs and other maintenance issues.

When buying a business, buying the property too is not always the best way to go. You have to take into consideration your financial situation, your motivation behind buying the building and whether or not you are ready to take on the challenges of owning commercial space.

Peter Siegel, MBAAbout This Author: Peter Siegel, MBA (Business Purchase Financing Expert, ProBuy & ProSell Program Advisor) at BizBen (started in 1994, 8000+ California businesses for sale, 500 new & refreshed postings/posts daily) working with business buyers, business owners/sellers, brokers, agents, investors, & advisors). Phone him at 866-270-6278 to discuss strategies regarding buying, selling, (or financing a puchase of) California small to mid-sized businesses.


Categories: Buying A Business


Comments Regarding This Blog Post


One of the greatest benefits of owning the land is no landlord or lease. I remember when I owned my own business and the landlord always raised my rent, and so I felt I never really had any security. One time the landlord made me relocate to the end of the shopping center, which ultimately was a financial disaster, because my business dropped by approximately 50%.

One of the greatest benefits is that when you own the land and the business is that when you do eventually sell the business you can be a landlord to someone else. One of the things to remember is that you only pay for the property if you can afford the payment through the income of the business, but there is small business loans available too. Owning the property is a tremendous benefit and should be desired.


  Helpful Resources To Assist In Selling And Buying California Businesses

Diane Boudreau-Tschetter: Escrow And Bulk Sale Services

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Janet Carrera - Escrow & Bulk Sale Services - SF Bay Area

Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.

Helen Yoo: Escrow & Bulk Sale Services - Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 800-864-0420.

Elizabeth McGovern: Escrow Services - SF Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.

Brad Steinberg, Broker - Laundromat Specialists

Laundry specialists - founded in 1968 by three laundry professionals, PWS is a family-owned corporation. Through the years it has grown to become the largest vended laundry equipment distributor in the United States. Call Brad Steinberg at 323-721-8832 to sell or buy a coin or card laundromat.

Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses

Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews

How Many Listings Is Too Many For One Broker To Handle? Is It 5? 10? 20?

Peter Siegel, MBA in this Vlog/Podcast discusses how many listings is too many for one business broker to handle at one time. Is it 5 is it 20? I recently had a coaching call with one of my BizBen broker clients who asked that question this week. There are many factors that go into the answer.

BizBen Index: Weekly Results - 221 California Businesses Sold 1/23 - 1/27

For the week of 1/23 thru 1/27, 221 CA businesses were sold by business owners, business brokers, and agents. In 2016 16,858 CA businesses have been sold. Last year (2016) 16,858 businesses sold in CA.

How To Determine Whether The Buyer For Your Business For Sale Is Sincere

A problem owners encounter when offering a CA business for sale is that not all so-called business buyers are qualified to make the purchase. It's frustrating and costly to waste time showing non-qualified buyers the business. Here are ways to identify time wasters so the focus is on real buyers.

Selling Your Business To One Of Your Employees - A Good Idea? Pros And Con

After investing years of time and talent into a company, many small business owners want to feel like they are leaving their business in good hands and for that reason, some sellers opt to sell their business to an employee. Peter Siegel, MBA talks about the pros and cons to taking this route.

Uncover Hidden Problems In Due Diligence When You Buy A Small Business

Most everyone who's decided to buy a small business in California knows the importance of due diligence. That involves close examination of a business prior to removing contingencies. But not everyone knows how to uncover problems that are not obvious. Here are five of the most common hidden issues.

Tips When Using Escrow Bulk Sale Services When Buying Or Selling A Business

The final part of the business for sale transaction is the escrow and bulk sale process by Peter Siegel, MBA (Business Purchase Financing Expert, ProBuy & ProSell Program Advisor) answers questions and describes the escrow and bulk sale process. Peter can be reached direct at 866-270-6278.

Before Buying A California Business, 10 Questions You Should Ask Yourself

Before buying a business, all serious business buyers should ask themselves some key questions about possible buying a small California business, franchise, or opportunity - from Peter Siegel, MBA (Business Purchase Financing Expert, ProBuy & ProSell Program Advisor with BizBen) at 866-270-6278.

Why Deals Fall Out: Unrealistic High Asking Prices Are Usually The Reason

The unfortunate truth is that approximately 50% of all small business sales transactions fall out. While failed transactions can happen for a many reasons, Peter Siegel, MBA (BizBen Director & Business Purchase Financing Expert) discusses the main reason deals fall through; steep asking prices.

See All News, Tips And Events


Craig Osterhoudt
Escrow Services From Helen Yoo New Century Escrow
Chris Lazuric Orange County California Broker
Larry Larsen Laundromat Broker


Auto Related
Business Services
Children Related
Communication Related
Computer, Internet Related
Construction Related
Entertainment Related
Financial Services
Health, Beauty Related
Home Improvement Related
Maintenance Related
Manufacturing Related
Media, Publishing Related
Pet Related
Photography/Video Related
Real Estate Services
Restaurant, Food Related
Retail Related
Service Related
Sports Related
Transportation Related
Travel Related
Wholesale Related

Auto Body Shops
Auto Repair Shops
Bakeries
Bars, Sports Bars
Cafe Restaurants
Car Washes
Cleaning Services
Clothing, Apparel Stores
Coffee Shops
Convenience Stores
Deli Restaurants
Discount, Dollar Stores
Dry Cleaners
eCommerce Websites
Fast Food Restaurants
Florists, Flower Shops
Full Service Restaurants
Gas Stations
Gift Shops
Gyms, Fitness Facilities
Home Health Agencies
Hotels/Motels
Ice Cream Shops
Juice, Smoothie Shops
Laundromats
Liquor Stores
Markets, Marts
Nightclubs
Pizza Restaurants
Postal, Shipping Stores
Preschools, Day Care
Print Shops
Salons, Beauty Shops
Sandwich Shops
Smog Test Only Shops
Smoke Shops
Spas, Med Spas
Sushi Restaurants
Tire Shops
Towing Services
Vending Routes
Wireless, Cellular Shops
Yogurt Shops

Alameda
Alpine
Amador
Butte
Calaveras
Colusa
Contra Costa
Del Norte
El Dorado
Fresno
Glenn
Humboldt
Imperial
Inyo
Kern
Kings
Lake
Lassen
Los Angeles
Madera
Marin
Mariposa
Mendocino
Merced
Modoc
Mono
Monterey
Napa
Nevada
Orange
Placer
Plumas
Riverside
Sacramento
San Benito
San Bernardino
San Diego
San Francisco
San Joaquin
San Luis Obis
San Mateo
Santa Barbara
Santa Clara
Santa Cruz
Shasta
Sierra
Siskiyou
Solano
Sonoma
Stanislaus
Sutter
Tehama
Trinity
Tulare
Tuolumne
Ventura
Yolo
Yuba

0 to $99,999
$100,000 to $249,999
$250,000 to $499,999
$500,000 to $999,999
$1 million to $2 million
over $2 million



BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2017, All Rights Reserved

                       
Sign Up Today - For Our FREE BizBen Weekly Email Newsletter
Includes The Best Info On Buying, Selling, Valuing, Financing California Businesses:
Articles, Blog Posts, Podcasts, Videos/Vlogs, Discussions, Q&A, Workshops, Webinars,
Resources. Watch For An Email Confirmation After Signing Up Above. Thank you.


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 
Search BizBen.com

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
How Many Months Should I List My Business With A Business Broker?
Financing Advice: Showing Add Backs To Get Business Acquisition Financin...