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Is it a good idea to rent a building or should I buy???

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texastechraider started this discussion 16 years 1 month ago

Me and a couple buddies are going to Costa Rica and are planning on starting up a hostel. We all have college degrees, know how to do a solid business plan, but during this crazy economic crisis are pretty sure it will damn near impossible to get a loan for it. We are contemplating renting out a commercial building when we have decided on the exact location.

Is this really a good idea and has anyone taken this route of renting the facility instead of financing it or outright buying it? Thanks.

TexasTechRaider

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aboriginalhostel

16 years

So do you plan to buy the space from your landlord? Like a rent to own process?

Well, we've planned to buy the property several times... But the owner wants to wait until the metro construction finishes. It's better for us as well, because we have a bubble going which hasn't burst completely yet. One or two years more, doesn't really matter... ;) We've been here for 6 years already and could have been paid into a mortgage from the beginning, although wasn't sure about the neighbors at the start. By now, we have a very good relationship with most of them, so I wouldn't hesitate anymore... :)

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remarcable

16 years

Well, we've planned to buy the property several times... But the owner wants to wait until the metro construction finishes. It's better for us as well, because we have a bubble going which hasn't burst completely yet. One or two years more, doesn't really matter... ;) We've been here for 6 years already and could have been paid into a mortgage from the beginning, although wasn't sure about the neighbors at the start. By now, we have a very good relationship with most of them, so I wouldn't hesitate anymore... :)

Hmm..that sounds like plan. I guess if landlord decides against it, you will get back the interest and principle, from the last 6 yrs.

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Peter

16 years

Me and a couple buddies are going to Costa Rica and are planning on starting up a hostel. We all have college degrees, know how to do a solid business plan, but during this crazy economic crisis are pretty sure it will damn near impossible to get a loan for it. We are contemplating renting out a commercial building when we have decided on the exact location.

Is this really a good idea and has anyone taken this route of renting the facility instead of financing it or outright buying it? Thanks.

TexasTechRaider

I think in some places it is better to rent than to buy.
In some places renters just not survive , and you can survive and make some money only if you are the owner.
What I see from my little experience , the best is to have hostel in the building weather you rent it to own it.
But not apartment with the neighbors.
The building where there are no neighbors , or where there are not many neighbors is much better.
When you have the hostel in apartment building , you can have problems with the neighbors , and I think you can not take a big groups , and must have the rules and pay attention to the behavior of the custommers.

May be for the beginning , just to see how it works , it is worthy to rent it first , and then to buy it.

Economic crisis gave some negative impact to the tourism , but may be young tourists will still travel.

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Dorstener

16 years

Me and a couple buddies are going to Costa Rica and are planning on starting up a hostel. We all have college degrees, know how to do a solid business plan, but during this crazy economic crisis are pretty sure it will damn near impossible to get a loan for it. We are contemplating renting out a commercial building when we have decided on the exact location.

Is this really a good idea and has anyone taken this route of renting the facility instead of financing it or outright buying it? Thanks.

TexasTechRaider

Have u guys checked the market there.....Costa Rica is an mostly an "american destination" and well, this crisis will defo affect americans travelling around the world...Maybe iam wrong, but we were thinking about doing something there as well, and decided to wait, cuz of the crisis....

Regarding renting or buying....in our case we always focus on how good is the deal gonna be. If u are defo getting a property that u know for certain is going to re value in the next 10 years, well we might buy it, if we are not sure, we just rent and it works just as perfect....

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TBD

8 years

My partner and I are looking to open a hostel in the US - we are in the midst of a hectic business plan writing season, and we are winging the whole thing.

We do have business mentors through SBDC and SBA's Score program, but because we are looking to open in a new market, you guys are the only support we have :)

I found a pretty expensive building that would be perfect for our business, and it would allow for expansion, but I would NEED to convince the owner to set up a rent to own deal with us.

I know, i'm crazy - ive seen peoples faces, but here is the scope:

$500k bulding

$14000 yearly taxes

$130k Down

$7333 per month for 5 years (includes taxes and R2O rent price)

........

Thoughts??? Am I absurd for even thinking to prepose such an idea to a building owner? He would either like to sell or lease the space and is an entrepreneur himself. Can you think of a better payment plan or any ideas that will help me sweet talk him into the idea?

Thanks in advance for your support!

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