BUYING A BUILDING FOR YOUR SALON,
SPA or BARBER SHOP
Advantages of Buying:
No rent increases - No landlord, so you won't be prone to increasing rents.
Savings - With the savings that come with ownership, you can channel more money into other areas of the business. Actually, monthly mortgage payments are oftentimes less than previous rent payments.
Equity - The residual value of the property beyond the mortgage and liability. You will one day own the property and it will be worth more than what you paid for it. Some lending institutions may even allow you to borrow against the value of the property soon after purchasing. This is most often done in the form of an equity loan
Appreciation - The rise in value and/or price, especially over time.
Flexibility - You can choose the type of mortgage you want. You do not have to worry about your monthly payment increasing each year, unless you so choose that particular type of mortgage.
Types of mortgages available are:
- Fixed rate (15 and 30 year)
- Adjustable rate (1, 3, and 5 year)
- Jumbo (15 and 30)
- FHA (15 and 30)
- VA (15 and 30)
- Balloon Mortgage
Tax Advantages - Mortgage interest and depreciation on commercial buildings are fully deductible for state and federal purposes. Furthermore, costs associated with the loan may also be deductible.
Disadvantages of Buying:
The responsibility for the upkeep and maintenance of the property is now yours.
Time wise, this can be a lengthy process. It could take a couple of months until closing.
If it is not a good location, and the business does not work out as planned, you are stuck with the property until it sells.
The advantages certainly outweigh the disadvantages. More often than not, Salon Owners find that purchasing a building is one of the best investments they can make for their business.
To visit our listing of Salons or Spas for sale with Real Estate CLICK HERE.
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