How do you value an auto repair shop when you own the real estate?
Buyers usually value the two separately: the business on its profit, and the building like any commercial property. Then they add them together.
If this sounds like youYou own the shop and the building and you're not sure how to put a number on the whole thing.
What you can do.
Business value
Based on profit after paying a fair owner wage.
Building value
Based on location, size, condition and zoning.
A fair market rent
The business shouldn't look better than it is because it pays no rent.
What to watch for.
- If you pay yourself no rent, profit looks higher than a buyer will count.
- Get the building appraised by someone who knows auto property.
- Keep the two in separate columns.
Owner to owner, and it stays private.
Nicole is a CPA and James has run shops for decades. We'll value the shop and the building together and walk you through how we got there.
Talk to JamesQuick answers.
Why would a buyer charge rent in the valuation?
Because a new owner would pay rent if they didn't buy the building. It keeps the comparison fair.
Is the building worth more than the business?
Sometimes. It depends on location and the shop's profit.
Thinking about what comes next for your shop or building?
Reach out and we’ll talk it through. No pressure, and the conversation stays private.
james@lotuspe.us