Some naive questions about buying commercial property

MrCostington

I am currently renting an office where the building has changes hands recently and the new owners have increased the rent and only offered a short term lease. So, I just had a look at some listings on Daft and the like with a view to purchasing a small office building (70-150 sq/M) and moving in myself and also renting out the spare space (I'd only need about a quarter of the building). Looking at the for sale listings, I realise I know nothing about the subject.

For example, take this one (not a suitable property for my needs, but does show my lack of understanding):

http://www.daft.ie/dublin/commercial-property-for-sale/restaurant-hotel-bar-for-sale/north-circular-road-dublin-7-dublin-440138/

So this is a coffee shop advertised at €50,000 and says "excellent opportunity to acquire this two-storey beautifully renovated coffee shop. Fantastic location!
the property consists of a seating area, food prepared area, toilet, Fully fitted kitchen, store rooms" - then it says "rent 2000/ month, rate 5000/year." - so what is actually going on here? Is this a business being sold as a going concern, but the business does not own the property. And if so, why is it being advertised on a property site? Or, is this the property owner advertising the property for rent, then what is the 50k for?


Then another property:

http://www.daft.ie/dublin/commercial-property-for-sale/offices-for-sale/10-railway-street-balbriggan-dublin-402246/

"€125,000 Office For Sale | 1,496 sq. feet (139 sq. metres)

1st Floor Location"

Picture shows a restaurant on the ground floor - so what do you get for your 125k? Does someone still own the building? Or is it like a residential apartment and different parts of the building are owned separately?


http://www.daft.ie/dublin/commercial-property-for-sale/offices-for-sale/2-swanward-business-park-ballymount-road-upper-ballymount-dublin-385933/

"€70,000 Office For Sale | 517 sq. feet (48 sq. metres) ... Title We are advised the property is held under a long leasehold" - this means you own the building but not the land it's on, correct?

As per my post title, I know these are very naive questions, hope you do not mind!

mrawkward

1)The coffee shop is a lease for sale.
2) You are buying a floor in a building....same as an apartment
3) Long lease hold is often 999 years.

Get the info, title etc and have it checked by a solicitor before you make an offer!

MrCostington

Thanks for that.

So in case 1), if I understand correctly, a lease is basically a contract between landlord and tenant to rent a property for x years. So it is common to charge a fee to offer a lease, AND charge rent? Is that not a bit greedy, like if I went into Hertz and they said we will charge you 500 to agree to hire you the car and 100 per day - is this basically the situation?

What are downsides to case 2?

In case 3, if I were to but this property would I still have a landlord?

I'm nowhere near picking up a phone yet to make an offer, I'm still trying to understand the ads!

Graham

For the coffee shop

It sounds like you'd be buying the existing business of the coffeshop owner, part of which includes taking over the lease and paying rent.

If you'd spent thousands kitting out a shop, a few years building up a business, attracting a clientele, increasing turnover etc you would no doubt also attach a value to that.

For the long leasehold office
I would guess this would give you the for all intents 'ownership' of the office for the remainder of the lease (no further rent payable).

mrawkward

Long lease hold generally means a very small rent for a very long time.100s of years for a few € per year.