philly fresh

my neighbor is selling his shop next door to me and is gonna be getting back to me with a price within a week to see if ill take it or if im gonna have to lowball him. property is on 1/3 acre with a 1500sq/ft shop with a small office in the frong. Building is 30x50 and has electric. water is supplied by a well which is not in his land. tax office states that, that property is zoned as commercial and the value of it is only 51k. there are renovations to be made as well as a well being dug.

f i can get this shop what is a good way to make money off of it. i k now renting is one, but maybe something i can do that will gain me 1600 dollars a month minimum. it used to be a welding shop with two 14 bay doors. i have an ornamental fence business so i have no need to move to a smaller shop. what is your advice guys. if i dont buy it the guy acorss the street will buy it and fill it with watercoolers. thats what he does for a business. want to check google earth this add {502 W. Nelda, Houston, Tx 77037) you will see his back yard across from me filled to the brim with those coolers.

LaCostaRacer

If you're looking at renting the property, you need to determine what the market rent is for the property. Once that is determined then see and if buying the property for 50k pencils out. Most investors apply a 'multiplier' to annual rent to determine the market value for a rental property. You're fortunate that this property is in Texas that has a much stronger economy than other parts of the country. I don't rent commercial property but apply these techniques to residential.

5o9

You want it to rent for $12.80 per square foot per year. The tax office says it is worth $34/sf. You need help, to find out market rent, and expected expenses. It may be possible to get a commercial broker to provide a broker's price opinion, for perhaps less than $500. You seem to know so little, I suggest that you are not presently qualified for income property ownership

MR1

Assessed value is for tax purposes and generally not related to market value.
FWIW, I agree with 5o9.

philly fresh

well let me see if i can answer the statements made. current market rate is about 1.20 per sq/ft for commercial space in this area, but comparable spaces rent for about .50 cents per sq/ft. the reason i brought up renting was because i would presently not have a use for it. i own the house next door and would rather buy it and not use it than have it be used for something like the picture and devalue my property if i ever decide to move plus it is an eyesore. attached is a picture of what the property would end up looking like. i will not disagree that i do not have exp in renting commercial property, i for all intensive purposes could just buy it outright, level it and have a bigger property and a pool. also, the lot next to that is a FEMA lot that is leasable only to the property owner of the lots to the left and right of it. It would also be something that i could do to have more room if i do decide to get a tenant or just need a big play yard.

philly fresh

http://www.flickr.com/photos/5581269...ream/lightbox/

MR1

Photos look like a primarily residential neighborhood. How much demand is there for existing legal commercial businesses in the area?

If you put a pool or other improvement on the other lot you will almost have to sell the lot along ith yours if you ever move. Would that make you have the largest and most expensive site around? If so, may not be a good thing. Possible to make money short term by selling it as a vacant lot? Do you want the responsibility of a vacant parcel?