What Buyers Look For When Puchasing A Leisure Property
About Australian Leisure Property
1. Well presented and well maintained property.
Do you remember that restaurant or coffee shop you went to where the cutlery and crockery were stained, the?wineglass still had lipstick marks, last weeks flour and other dry goods delivery was still sitting there in full view outside?the kitchen, the wallpaper was peeling away, there was a strange smell coming from somewhere as you walked around?to the bathroom and when you got to the bathroom there was no soap, the tap was dripping and there was a stack?of soft drink cartons sitting there in the back corner? Sound familiar? Chances are that the place was full of other?maintenance problems and food was less than impressive.
First impressions are usually lasting impressions. If a property or business looks well-organised and maintained?potential buyers usually think that it is usually highly likely that everything else is in order.
2. Accurate accounts.
Today?s buyers are as astute as ever usually employing their own accountant as well as a solicitor to minimise the risk in?the purchase. Most accountants advise their clients to go through at least three years of audited figures to determine?the feasibility of the business.
If you do not provide these accounts or these accounts are not available you must be able to provide other convincing
documentary evidence of the current performance of the business.
3. Fully executed and registered lease.
This would be required if the leisure property includes a business i.e. a leased investment or a business only?transaction.
4. Approvals and licenses are all current.
Buyers don?t like surprises. You can not simply brush these items under the carpet. Make sure you go through all these?items with your solicitor at all times because you never know when they may come up.
5. Full inventory list.
Simply buyers want to know what they actually purchasing. You should consider hiring a quantity surveyor to go through?your property to find any hidden depreciation items which would increase the after-tax profit and sales price. Also note?all items which would not be included in the sale. I.e. items which are leased plus any items or equipment you simply?don?t want to be included in the sale.
6. Current real estate contract with current 149 certificate plus lease documentation (fully executed).
Waiting till you find a buyer to get a contract of sale ready is not a good idea. Depending on the property and business?to be sold and the documentation required solicitors can sometimes take weeks in getting a contract of sale ready. This?could cause the hot buyer to cool down. The biggest killer of property/business sales is time. It is important to be ready?to move forward straight away.
7. Possibility of vendor finance. With today?s financial situation it may be worth considering to speed up?the sales process as we have found that many sales fall through because of tougher lending criteria.
If you wish to discuss any of the above please feel free to contact us.