If you have been looking to invest some money, and you finally decide to buy a pub, you may be wondering if your decision is wise. Just like any other buyer, you want to mitigate risks by ensuring that your investment will meet its expectations regarding returns. The continual growth of the lodging and hotel industry implies that the market has an adequate supply of nice pubs you can select from before you buy. If you're looking to buy one, you may consider the following five factors:
Leasehold or freehold
Leasehold pubs imply that you are a tenant, and you have to pay rent to a landlord. The leasehold gives you the right to use the property on the land but it does not grant you the exclusive ownership of the pub and the land on which it is located. On the contrary, freehold leases make the buyer an outright owner of the pub establishment together with the land. For leasehold ownership, you have to remit service charges to the landlord, which is expenditure on your part as the owner of the pub.
The pub's trading accounting
You need to study the pub's trading accounts whether it is a freehold or leasehold. The seller must provide you with the statement of financial information covering a reasonable number of years depending on the length of time that the pub has been in business. Ascertain the other income channels for the pub besides selling drinks. Examples are gaming, functions, and outside catering. Consider the costs of staffing for all sections of the pub.
Running a pub is physically and mentally challenging. You will have to work for long hours, most of which may be unsociable. You also have to deal with different types of people that may compel you to stomach their characters and actions for the benefit of the business. Commitment and adaptability will enable you to manage the strains you will come across in the course of duty.
Locations determine the performance of a pub. Pubs can be within the city, the suburb, or the countryside. City pubs are located at the core of the towns while suburban pubs serve the communities in the outskirts of cities and towns. For country pubs, the customers may not live nearby, and they often target travellers and those looking to have a drinking spree away from the cities.
Purchase agents and the price
You need professional help for the property, business, and legal aspects. Some sellers may misguide you into entering unsuitable contracts, which is the reason you require an agent. They can contact valuers, solicitors, and stock takers before they advise you on the right price to pay for the pub. Although they will charge a fee for their services, they are worth consulting if you want value for your money.
Keep this information in mind as you're looking for a pub for sale so that you'll be able to make a wise investment.