Purchase or Leasing Warehouse Space

[AdamPollard55]

Hey guys!

I'm in the process of planning a skatepark business, and need some advice about the warehouse space we'll construct our skatepark in..

Basically, we're unsure whether or not we should be buying the space, or leasing it.

We're looking for a pretty simple space, around 25k sq ft. And we'll keep it for at least 5 years (more likely 10 or 15 years), so instinctively it feels like we should be looking to purchase it. However, we don't have any experience procuring a building like this, so we're not sure where it makes financial sense (or is even financially viable for a startup?!).

Let me know what you think!

 

[Talay]

You want to build a 25,000 square foot skate park in a building ? Who are the target customers ? Surely not the local youth without 50p in their pockets ?

Even if you find this is a viable idea (is isn't by a million miles IMHO), you'd need a lengthy lease due to the cost of building it. Buying would be ideal but I don't see the ROI on a few million £££ to set this up.

 

[businessfunding]

The only circumstances you would want to purchase this type of premises are:

1. You have plenty of cash resource to fund deposit, start-up costs and repayments whilst business is getting recognised.
2. You want to lay landlord (and pay business rates) if the business doesn't succeed. These types of comercial premises don't sell easily.

By leasing you should be able to get a payment-free period whilst you fir out and develop the business plus you will keep your cash free.