Real estate is among the most intelligent business investments to be made. Residential real estate is at an all-time high, but what people do not realize is that investing into business real estate is where the true profitability lies.
Your home is important for your personal use, but more and more people are discovering the potential for running their own business with a real estate investment. There are many options to choose from, but if you want to maximize potential for profitability on the fast-track, investing in a pub is the way to go. Here is a guide on how to invest in a pub to make it a success.
Examine Yourself
Before you decide to invest in a pub it is vital that you do an extreme amount of self-examination. Not everyone is suited for running a pub. The demands on a pub owner are great and this is especially so when choosing to purchase a pub that is a hot spot of a town. People have a certain expectation when they visit a pub and expect a certain atmosphere.
Even the slightest changes to the environment can drive customers away. If you are among the many that want to change the attributes of the pub, you may find opposition. You will also find that the pub owner life is not just about taking in profits. There are long hours for the pub owners and unless your pub comes with a staff that is perfectly suited for the demands of a manager, you will have to assume all responsibilities.
How do You Wish to Invest?
All pub investments are not the same. It is not a matter of just buying the pub and managing the business. There are three types of investment opportunities to potential pub owners and all three have their own unique values.
Lease
If you are a novice pub owner, a lease is not generally the best option. It requires a skilled hand that only comes from a lot of experience within the industry. These are the chain pubs and require an investment of between £50,000 and £250,000. These pubs are known throughout the industry and each one has its own set of rules to follow for investing in the much larger company. Investors are also required to sign a lease for anywhere from 10 to 25 years, so it is quite a long-term investment.
Tenancy
The best investment for someone new to the pub investment scene is the tenancy option. This enables the least amount of investment and time, but also gives the novice pub owner experience to move to the other levels of pub ownership. For an average period of three years, the investor is able to take in the profits with an initial investment of £15,00 to £50,000. The business for sale comes with all of the equipment and often all the new owner has to do is maintain the pub for the period of the tenancy.
Freehouse
More experience is required for the freehouse option, but it does mean that the owner pretty much has free reign over the property. It is solely their business without anyone else’s hands in their pockets and therefore the most profit can be made, but also the most failure opportunity if the business is not maintained efficiently. Prices for these opportunities can range from £50,0000 up to £1.5 million, so if you choose to invest in this manner, you need to have substantially deep pockets.
Location
One of the most important aspect of any real estate investment is its location. This is especially true when the maximum amount of profit is desired. Locations from pubs include country pubs, suburban pubs, and city pubs. Each one is quite different from the other. Country pubs have to offer the right type of atmosphere to draw in a crowd.
They have to be known as their own destination as they are typically far out of the mainstream and require travel. Suburban pubs are the center of small towns and often where the meeting place for the townspeople are, so they have to be very friendly places to gather. City pubs have a different atmosphere altogether and before you invest any money into any pub, it is a good idea to visit different styles of pubs to ensure you understand what is required from each type.
Investing in your very own pub may be your ultimate dream and the way you want to live the rest of your life, but it does take some planning to ensure that it is done properly. Profitability can be huge in the pub scene, but only if the right owner takes hold of the business. Take the time to consider all the options for pub ownership and always be honest with your intentions as well as your own means to make it a reality.
If your looking to buy a pub why not check out our pubs for sale here
