Commercial Real Estate and Businesses for Sale in the LBI Real Estate Market
Businesses For Sale on Long Beach IslandCommercial Real Estate on Long Beach Island
Commercial real estate on Long Beach Island offers some great opportunities, but also requires a careful understanding of the current market trends. Of the different areas of the LBI real estate market, such as single family homes, condos and vacant land, commercial real estate tends to show the least amount of activity as the pool of buyers is smaller than it is for the residential areas of the market. Commercial real estate can however offer a unique chance to live and work at the beach and for many, is the realization of a wonderful dream. Commercial real estate can be divided into two categories: the physical real estate including the land and the building and the business currently in operation (if any). Placing a value on each part takes time and an understanding of businesses for sale on Long Beach Island.
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Businesses for Sale on Long Beach Island
Evaluating real estate, be it commercial or residential, is often easier than evaluating the value of a business. Most of the value in the LBI real estate market has to do with the land and prices are easily determined by examining the current market conditions, recent sales and the active inventory of homes and properties. To place an appropriate value on a business takes a little more effort. There are three core aspects of a business that influence its value in the LBI real estate market:
- The amount of inventory (including store fixtures)
- Past years sales records
- The goodwill of the business
The amount of inventory a business has to sell is a fairly straightforward method of valuation. A buyer can expect to buy the current inventory at wholesale cost or can expect to pay for the equipment currently in place (discounting of course for condition).
The sales records of a business can be a little harder to determine. Many businesses on LBI are highly profitable, but many are not! It is important to look at the amount of inventory that has been ordered each year and estimate what the true sales volume is. The cost of operations can be deducted from this total and a buyer can have a good idea of what the true profitability of a business on LBI is.
Goodwill is an even harder aspect to place. A business that fills a niche, for example The Chicken or the Egg in Beach Haven, clearly has a lot of good will. That restaurant in particular has won many awards, has been on TV and has an outstanding reputation. There is a lot of value that goes with gaining that kind of fame! A more generic business, for example a clothing store or an ice cream shop, may have a fantastic business, but it could also be easily replicated. Therefore, the value of their goodwill will not be as high as a truly unique business.
Businesses for sale on Long Beach Island can be a great opportunity, but only if purchased at the right price and terms. Both buyers and sellers need to be aware of the current market conditions and be realistic about the transaction. Unlike residential sales, commercial real estate on Long Beach Island is mostly about the numbers. If a business turns a good profit and asks a fair price, it will sell or rent in no time! For more information about LBI commercial real estate or businesses for sale on Long Beach Island, feel free to contact me, Nathan Colmer, and I will be happy to answer any questions you have!
By : Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
www.BuyLBI.com
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