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Is it worth it to buy a building?

4K views 30 replies 20 participants last post by  merrimacmill 
#1 ·
I have an opportunity to purchase some commercial land. 2 acres with large pole barn with attached office space with 4 offices, bathroom, & furnace room. Fenced in back lot. The location is 3 miles from my house. On a major road so exposure is good. And I drive past it from my house to get to the town where I do most of my work.

What I need to know from the members of LawnSite is if having a “brick & mortar” building has increased sales? Either of lawn & snow services or landscape installs. Do people driving by stop in and say, “Can I get a quote for mowing my grass?” or “Can I get a quote for putting in a retaining wall?” ect.

I run my company out of the same property as my home. All my trucks are out front and people know what I do. I have had maybe 5 people stop in and ask if I did such and such and if I could give them a quote in the last 2 years.

I realize that having a larger shop I would probably do more preventive maintenance. I would have a cement floor to replace the fly wheel on one of my trucks that last week I changed in the dirt of my driveway. I could sell bulk materials such as mulch, sand, stone etc. I would get all of the “junk” out of my yard. My workers would have a place to park instead of in my yard. The positive list goes on and on. But there is negative stuff also. More taxes, new electric bill, new heat bill, have to drive to work to do stuff after hours. Would have to hire someone (or two) to stay at the building if I wanted to sell stuff from there.

If someone has moved their business out of their house to a dedicated business location, has it increased sales?

Thanks for the help.
 
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#5 ·
I have always operated my business from an industrial unit or building. I will admit it does solidify your existence, and as stupid as it sounds, makes you legit. Has it helped my business? Definitely. We stopped leasing two years ago and bought our own place.

The beauty of this property is that its located on a street full of major cottage builders and boat dealers. We get walk ins all the time. We're in the planning stages of a display area in the front to showcase some of our work. It should be an amazing selling tool. This couldn't be done from home. Our yard here is big enough to allow us to store extra material, and stock as we need or for the odd delivery-something i'm going to expand on next spring.

Plus, this business takes so much from us on a daily basis, I couldnt imagine having to work on stuff when at home-I'd really have no life.

And, in the end, you have something to sell, that hopefully has appreciated over the years. Good luck with that decision. I'm glad I made mine.
 
#6 ·
Everything else we buy for the business is a declining asset. This is a no brain-er! Buy a appreciating asset for a change even if it never brings in a dime. It's also tax deductible. It will also give you more legitimacy when you are interviewing. Employees don't know where you live, always a good thing. If you get any work from it it is a bonus but the re sooo many reasons to have the business buy you a building/land. Yes, yes, yes, buy it yesterday, if not sooner.
 
#7 ·
Everything else we buy for the business is a declining asset. This is a no brain-er! Buy a appreciating asset for a change even if it never brings in a dime. It's also tax deductible. It will also give you more legitimacy when you are interviewing. Employees don't know where you live, always a good thing. If you get any work from it it is a bonus but the re sooo many reasons to have the business buy you a building/land. Yes, yes, yes, buy it yesterday, if not sooner.
All seriously good points.

I havn't the same experince, but one of our competitor have a nice building on a main strip like your describing. He's been in buisness for 20+ years and it seems to be good exposure. David has often said he'd liked to have done something similar.

I'd say go for it. Especially if it is affordable.
 
#8 ·
Everything else we buy for the business is a declining asset. This is a no brain-er! Buy a appreciating asset for a change even if it never brings in a dime. It's also tax deductible. It will also give you more legitimacy when you are interviewing. Employees don't know where you live, always a good thing. If you get any work from it it is a bonus but the re sooo many reasons to have the business buy you a building/land. Yes, yes, yes, buy it yesterday, if not sooner.
I agree! Appreciating assets are good. BUT you will not be able to write off the entire asset. You can depreciate everything but the land over a period of years... thinking 38... so the tax advantage is not significant. I just bought a commercial building a few months ago... and went over specifics with my accountant before the purchase. I would not expect a major tax deduction.

As far as increasing business... don't plan on it. That would not be the reason I would purchase a building. I bought mine because running a business out of your house w/ several employees was against zoning regulations, and it gets kind of tiresome having employees, trucks, equipment around a residence with your family.

The deciding factor should be PRICE. Now might be the time to buy... since nothing is selling. If it is a good location... it should go up in value. The deciding factor should be price... if the price is right you cannot go wrong. Make sure you are getting it below market value. When I bought my building, I looked it up on tax assessors and basically bought it for what they built it for 7 years ago. It would have cost me at least 50k more than I bought it for to build the exact same building and yard today... if you can steal it... do it.
 
#9 ·
If you can afford it, do it. Use a laptop for all your work so you can take it home with you. The exposure alone would be good. Plus if people see you sell mulch, there's a good chance you'll get to install it for them as well.
Great advices from some one that doesn't even know how to keep one employee. Come on dude... maybe should exclude yourself from discussions over your head.:dizzy:
 
#13 ·
I am in the same boat, it looks like there would be NO increase in sales, unless you turned it into some kind of store, "Plants, Fert, and such"

It would be nice NOT to open your front door and be at work.

thanks for posting, I'm thinking about doing the same
 
#14 ·
Thanks for all the posts!

To clear up a couple things. I would not pay cash for it as I don't have that kind of cash laying around. The office space could not be rented out. I do like walking out my door and being at work, but it does get old at times.

I have enough space at my house to build a 40 x 60 pole barn that would house my equipment and small office and a place for the employees. I could build that for $30k and this property is $150k.

It does make your more creditable if you have a commercial place, but I want to make money from it. Yes, I realize that property just goes up, because they aren't makeing any more of it.

If anyone else has property that they get walk in work from, please let me know.
 
#15 ·
You got to look at whether putting a building on your property will make it more sellable in the future. There are a lot of "rag tag" looking lawn companies in our area that bought commericial properties several years ago and these properties are worth a lot of money now. A property if located on major roads can be a good marketing thing.
 
#16 ·
A local company around here has bought 2 buildings and converted them into what they needed. They did decent amount of exterior work to showcase their abilities and give the area some much needed curb appeal. They don't get a huge amount from it but from talking to one of the guys, he said its been a positive venture.
 
#17 ·
Thanks for all the posts!

To clear up a couple things. I would not pay cash for it as I don't have that kind of cash laying around. The office space could not be rented out. I do like walking out my door and being at work, but it does get old at times.

I have enough space at my house to build a 40 x 60 pole barn that would house my equipment and small office and a place for the employees. I could build that for $30k and this property is $150k.

It does make your more creditable if you have a commercial place, but I want to make money from it. Yes, I realize that property just goes up, because they aren't makeing any more of it.

If anyone else has property that they get walk in work from, please let me know.
Personally if I could put 60% down I wouldnt buy it, and even then it would have to be a real good deal. Building a shop at your home sounds nice.
I think realestate will stay slow for atleast 1 more year so you may fine a better deal if you keep looking.
 
#18 ·
We moved from the home shop to a new commercial location 3 years ago. Financially the new walk in business comes no way close to justifying the investment. I'm not saying that there isn't walk-in customers, its just not some sort of earth shattering difference. We are located in a seasonal resort area so our customers base multiplies by about 75% between June and August. During these times I would say that there is an average of 3-5 walk in customers per day during mid-week and 5-8 on and around the weekends. Most of the people who stop in are either looking for free advice on lawn issues do it yourself paver install etc..... , looking for bulk materials, and the least common for us is someone stopping in looking for an estimate.

In the three seasons at the new location I probably have turned 10 walk-ins into landscape jobs and maybe 15-20 into lawncare. If I had to guess I am sure that a significant number of these jobs were coming my way anyways, the customers just opted to stop in versus call.

I could go on for hours talking about all of the positive reasons for moving but I think you know those and you are mostly looking for the additional customer numbers. However I need to say that the biggest bonus for us in the move is the credibility that it gave our business. It definitely moves you from the "works out of his pole barn" class into being a true professional in the industry.

Sorry about the long post but I saw some similarities in our situations and thought maybe I could help. Given the option of going back in time the only thing that I would have done different is I would have made the move sooner.
 
#19 ·
HL Landscape, That is exactly the information I was looking for when I made this post. 3-5 during the day and 5-8 during the weekend seems like a lot to me right now. But it doesn't seem like enough to pay someone 8-10 hours to sit there and wait for them.

I love the idea of having a "store" or shop building. I think the exposure would be nice and maybe bring in a job or two. I am still on the small side with me and 3 employees, but we do our fair share.

What would bother me is if next spring I drove by (every day) and saw someone else in there. Either landscape company or not.

Thanks for the great info. I will take it all in and make a decision some time.
 
#20 ·
B & B,

After reading your post you have me re-guessing my estimate. My numbers are probably on the high side. There is alot of traffic but the majority is not new customers. You got me wondering now, I will start a tally sheet to keep track and let you know in a couple of weeks.

Obviously I don't know your finances but, if they look good don't hesitate too long.
 
#22 ·
If someone has moved their business out of their house to a dedicated business location, has it increased sales?
i dont know. i still work from my moms house. we park the 7 walkers in her living room. the trailers are stored in her back yard. the 20 employees park in her front yard, the street in front and next door neighbors front yard. and the kitchen fridge has nothing but beer in it that we bought with all the beer cash we make out mowing on the weekends and evenings after we get done with our shifts at taco bell or the local fire/police station.
 
#24 ·
I went threw this 4 years ago. We worked from my house in a Residential zoning (2.5 car garage, 1/2 acre lot, evey thing was neat & behind a 6' stockage fence) , we ran into zoning problems (1 neighbor calling town). I looked at commercial space, in my area I would of needed industrial zoning, taxes on commercial are about double that of residential, & prices are way high, even in the ghetto it was over 100K, & 10K a year in taxes.
We ended up moving to an agricultral area (an old farm), we have 9 acres of the original 250 (all is still being farmed, so we have NO NEIGHBORS to *****), has a 36 x 80 barn, concrete floor, water, 1/3 insulated & heated, seperate drive. 2500 sq ft house, pond, better school district, kids have a horse, 4 wheelers, etc. It cost us what the commercial building would of per month, we have already told the farmers if they are planning on selling (there not)to let us know & we will buy the land, I do not want neighbors again.
It has worked out really well, combined with the fact that the business has slowed dramatically, I would've been screwed now, whereas this we can afford, because we also live here.
 
#25 ·
Brianslawn: Thanks for the great advice. Really helpfull. :dizzy:

Mike Fronczak: That is where I'm at. 2 acres, my closest neighbor is 1/2 mile away. This year I'm surrounded (on 3 sides) by seed corn. Kids have go carts, I have a large brick paver patio with out door kitchen, water feature & two decks. Wife has a pool and a volleyball court and a Kick-ball field in the 1 acre side lot.

All I NEED is another drive in from the road and a 40' x 60' pole barn. Makes a lot more sense at this stage to just put up the barn instead of buying the property. Just incase I decide to (or can't) work anymore.
 
#26 ·
Brianslawn: Thanks for the great advice. Really helpfull. :dizzy:

Mike Fronczak: That is where I'm at. 2 acres, my closest neighbor is 1/2 mile away. This year I'm surrounded (on 3 sides) by seed corn. Kids have go carts, I have a large brick paver patio with out door kitchen, water feature & two decks. Wife has a pool and a volleyball court and a Kick-ball field in the 1 acre side lot.

All I NEED is another drive in from the road and a 40' x 60' pole barn. Makes a lot more sense at this stage to just put up the barn instead of buying the property. Just incase I decide to (or can't) work anymore.
The only problem with that is if you decide to sell your property you will probably not realize your 30k investment in the barn... if you are planning to stay there forever and are compliant w. zoning it might be good.

Be careful about that zoning... it only takes one liberal snot to mess up your plans. I was planning on getting a commercial building, but the liberal snot made it happen a little faster than I had planned. You might want to make sure it is zoned for your business... and if not get it zoned for your business before you make the 30k investment.
 
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