Is it better to lease or to buy a nightclub??

[promotions1]

If you are getting into a nightclub business there is always a risk of failure. What do most club owners do once they open the club, do they start from scratch and build the club from the ground up, do they buy the building, or simply lease a building. I talked to the club owners in my neighborhood and all of them lease but is that the best way of doing it??? I know its the cheapest way of doing it because you don't need the large start up costs for the bulding, you just put the money into the club alone. Need some feedback??



Ralph

[castlepr]

I would say lease with an option to BUY if its a good building !

[fernando]

im very new, but it seems that it is much easier to just lease the building... I am in the process of trying to buy a building for 400-500k, and it is not easy to do so.. you have to provide a large downpayment, and paper work such as the current owners past 3 year tax returns for the business, proof you will make money etc... its just a lot of work that sucks..

[Peeps]

You have to think about your assets and the possibility of failure. Liquor and beer themselves are relatively cheap so a beginning inventory will not be the bulk of your cash. although there are a bunch of other costs your real estate I think will be the bulk of it. If you own your property it will be a asset and not a liability. So if you do go under you can sell your building for a big chunk of that change you owe your debtors. I would get creative with location and property values and work it into your business plan to own.

[bennyb]

I was taught that...if you have the money...you should always buy the building. In many instances, like San Francisco for example, the downpayment on the building is often equal to the cost of buying out the lease. THEN your monthly mortgage can come to exactly the same as your rent on a lease would be anyway! Once you have the building paid off, that is a huge chunk of overhead that instantly disappears and reappears in your profit column. Furthermore, when you're ready to move on, you can then sell the building OR lease it to some other schmuck, giving you monthly income that is on autopilot.

I say buy the building if it is possible. There might be a little more paperwork to figure out and a little more risk, but it has the potential to pay off big time if you do it right.