My partner and I are looking at investing in a Gymnasium in Brisbane, in the suburb of Paddington.The asking price is $70k and the gym comes with $50k worth of equipment. It is purely just a thought at the moment, I am looking for some advise from people as to where to from here? What do I need to look into, etc Can I obtain financials from the company? My portfolio currently consists of a house, unit and a block of land. I am looking at branching out into something different.I know a big part of this would be getting the insurance. How does that work?
I would really prefer to buy a kebab shop but he is keen on the gym idea, which would be better, hassle wise etc
cost, etc Would really appreciate some advice Cheers MelWithout financials you have no chance of obtaining any finance.
If it is the gym i think it is then you have no chance of obtaining any finance anyway as the business is leasehold and the equipment is worth nothing to as Bank. Without equity in your current portfolio you will have little chance of funding it.
Richard Taylor | Australia's leading private lender
Thanks for your response Richard.Would you buy a business or stick with property?I would have the equity in my portfolio to fund this, What would u do? TaMel
Mel
Personally i have done both. But i have to say a lot more property than business.
Richard Taylor | Australia's leading private lender
Hi Mel,
Have run a few small businesses over the years i wouldn't see the decision small business veruses property investment but small business veruses working for someone else. With any small business there will be hours that you will need to invest into it to make it sucessful.
If you buy the gym how many hours a week will you need to work? Alot of gyms will be open for about 90 hours a week, during the week the open early and close late to allow people to do work outs before work and after work. The less hours you work the higher the wages bill. The other thing to consider is no staff member will run YOUR business to the same level that you would do yourself.
If you need to work 60 hours a week, and make $35k a year…doesn't really make for a good investment. The other thing with running a small business is income isn't guaranteed. Many people have started cancelling gym memberships due to increasing fuel prices and intrest rates. This hurts when your costs of living increase but your income decreases as other people cut back on "luxuries".
If you have an interest in property investing and are relying on income from a small business to fund loans it can be more dificult to get finance. Banks will quite often look at a couple of years of financials, one bad year in business can affect borrowing power for the next couple of years.
You may be better off staying in paid employment and then investing in property
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