5000sq ft barn, what shall do with it?

IEM

Member
Location
Essex
Right
Now got 2 kiddies futures to think about and looking to maximise income from some non farming assets.
One is a 5300 sq ft brick barn, 25 ft to the eaves currently let out to one person for storage for circa £2.50/sq ft.
It is on the edge of our farmyard and has a couple of other buildings attached which are also let out.
I am looking to maximise income and am happy to invest up to about £150k if I can get a good return. It could be something that takes up a chunk of my time to run rather than just letting it out. We have reasonable road access, 20 mins from motorway, 30 miles from central London, 5 medium/ large towns within 10 miles. I have an idea but wanted to pick brains of the forum for inspiration.
So come on, what SHOULD I be doing with the building??
 

Bruce Almighty

Member
Mixed Farmer
Location
Warwickshire
How keen & able are you to building work yourself ?
Your £150k done yourself could be £250k worth if you get someone in

Would it be best converted to residential & let out ?

Is it suitable for a wedding / function venue ?
 

SoilMan

Member
Location
Kings Lynn
Wedding venue?

Me and the Mrs are getting married this year at barn venue near us and farmer is nicest chap you can meet and says it's the most profitable acre on the farm by many miles :)

His whole family put a lot of effort into running the venue as they enjoy helping with the "wedding experience" but I guess you can be as involved or uninvolved as you choose?
 

JCMaloney

Member
Location
LE9 2JG
Right
Now got 2 kiddies futures to think about and looking to maximise income from some non farming assets.
We have reasonable road access, 20 mins from motorway, 30 miles from central London, 5 medium/ large towns within 10 miles. I have an idea but wanted to pick brains of the forum for inspiration.
So come on, what SHOULD I be doing with the building??

Housing./Accomodation.
If you are 30 miles from central London, that means you aren`t that far from Greater London.In 10 years you/your kids will be even closer.

Its that or a great big cannabis farm. :) ROI would be great but there maybe some element of risk. :eek:
 
My initial thoughts:

DIY shed party venues with camping options - catering facilities, party room etc tipi outside?
Bunk accommodation YHA style
Office accommodation (need to check demand first)
Arts and craft studio rent
Cookery school (to let)
Caravan storage/car/boat (undercover very expensive)
Workshop rental - woodworker or car spraypaint

However, for £150k I would imagine you wont get much change from the above. As for return I dont know.

Use roofs for solar, biomass boiler anything to cut overheads
 

Jerry

Member
Mixed Farmer
Location
Devon
Here I would stuff it with caravans boats cars and also put in storage units for self store. In your location it would command a premium.
 
Depends on local markets.

I have converted several of mine in the last 12 months.

Depending on spec office / workshop / wharehluse is easy to manage once let

Get an agent out to have a look, lots of options, good luck and enjoy, v rewarding when everyone keeps thanking you for the job you did for them
 

IEM

Member
Location
Essex
Thanks everyone for replies so far. Here are a few thoughts on your comments:

Wedding venue: I had my wedding reception in the barn (only needed half of it to seat 150 people. With a good clean, some up lights and drapes in the roof it worked really well. In the run up to the wedding I was even thinking we should be letting it out. However by the end of the night and the hassles my own friends and family had caused I decided I couldn't cope with other people's guests! But I will give it some thought as may be able to get someone else to run it.

Residential: it could certainly make 3 substantial houses if the adjoining buildings were knocked down. When you take into account the loss of income from those buildings it doesn't look very attractive to convert and rent out. I wouldn't consider selling them either. Also I'd prefer to do something that doesn't vastly change the structure of the building to give future generations flexibility to do something different if needed.
We recently converted a neighbouring barn to residential and I am keen to at least finish paying for that before we do any more.

Storage: how much are people charging for caravan etc storage or indoor self storage? There is certainly demand for this and font think it has been overdone in this area YET. Is there demand for 'premium' self storage rather than outdoor shipping containers?

Offices: how do conversion costs compare to residential?

Renewables: we already have a fair sized PV system and the current roof wouldn't be suitable. Will certainly look at biomass etc when we decide what to do but fear I may have missed the boat.

Anyone know any good agents/consultants operating in this area? Not found one yet who I think is really useful.
 

D14

Member
Thanks everyone for replies so far. Here are a few thoughts on your comments:

Wedding venue: I had my wedding reception in the barn (only needed half of it to seat 150 people. With a good clean, some up lights and drapes in the roof it worked really well. In the run up to the wedding I was even thinking we should be letting it out. However by the end of the night and the hassles my own friends and family had caused I decided I couldn't cope with other people's guests! But I will give it some thought as may be able to get someone else to run it.

Residential: it could certainly make 3 substantial houses if the adjoining buildings were knocked down. When you take into account the loss of income from those buildings it doesn't look very attractive to convert and rent out. I wouldn't consider selling them either. Also I'd prefer to do something that doesn't vastly change the structure of the building to give future generations flexibility to do something different if needed.
We recently converted a neighbouring barn to residential and I am keen to at least finish paying for that before we do any more.

Storage: how much are people charging for caravan etc storage or indoor self storage? There is certainly demand for this and font think it has been overdone in this area YET. Is there demand for 'premium' self storage rather than outdoor shipping containers?

Offices: how do conversion costs compare to residential?

Renewables: we already have a fair sized PV system and the current roof wouldn't be suitable. Will certainly look at biomass etc when we decide what to do but fear I may have missed the boat.

Anyone know any good agents/consultants operating in this area? Not found one yet who I think is really useful.

Your location lends you to storage storage storage. We look after some units on a family members farm for them and its easy. Once you have converted it so that it is secure, relatively warm and has room for racking and possibly a basic wooden or steel container office in a corner, it will look after itself. Let the tenant do the office though so you are letting a bare space for them to make their own.
For anything over 2000 sqft I would use an agent because you will want a lease in place for the simple fact emptying anything more than 2000 sqft if rent isn't received can be very costly, where as smaller spaces are not so bad. Do not underestimate wear and tear to the access into the property from the public road because whilst somebodies business may start off a storage only, it may alter and become distribution so traffic levels could escalate. Detail it on the paper work. For anything under 2000 sqft just let it without the cost of the agent. Be clear with the tenant its rent in advance. Failure to pay means you will confiscate the contents. No lease means no contract. Price wise if you want to fill it then £4.50/sqft and they pay the business rate, elec, water and insure the contents. You insure the shed. Then set a reasonable but variable small service charge for the access and traffic.
 
Everything @D14 is spot on.

my agent charges 7.5% which takes a lot of hassle away from me. depending on your time you may wish to take this on yourself.

Be aware that once they become rated, if a tenant leaves you will be responsible for rates which can be draining! all of your answers will come forth when you look at the key question, what does the market want....
 

rob1

Member
Location
wiltshire
be aware of IHT implications, if rental income is kept to less than 30% of farm income and that goes through the farm account then you should be ok, here I find that small business and storage give the best return on capital invested, also if you charge at the top end of rents you will have a higher turnover of tenants, provide value and you get rent money every month
 

Clive

Staff Member
Arable Farmer
Location
Lichfield
be aware of IHT implications, if rental income is kept to less than 30% of farm income and that goes through the farm account then you should be ok, here I find that small business and storage give the best return on capital invested, also if you charge at the top end of rents you will have a higher turnover of tenants, provide value and you get rent money every month

If you spend your life worrying about paying tax you will never make any money

A tax bill is a nice problem to have, everyone's ambition should be to pay as much tax as possible even if that does sound a bit wrong !!!
 

JP1

Member
Livestock Farmer
Thanks everyone for replies so far. Here are a few thoughts on your comments:

Wedding venue: I had my wedding reception in the barn (only needed half of it to seat 150 people. With a good clean, some up lights and drapes in the roof it worked really well. In the run up to the wedding I was even thinking we should be letting it out. However by the end of the night and the hassles my own friends and family had caused I decided I couldn't cope with other people's guests! But I will give it some thought as may be able to get someone else to run it.

Residential: it could certainly make 3 substantial houses if the adjoining buildings were knocked down. When you take into account the loss of income from those buildings it doesn't look very attractive to convert and rent out. I wouldn't consider selling them either. Also I'd prefer to do something that doesn't vastly change the structure of the building to give future generations flexibility to do something different if needed.
We recently converted a neighbouring barn to residential and I am keen to at least finish paying for that before we do any more.

Storage: how much are people charging for caravan etc storage or indoor self storage? There is certainly demand for this and font think it has been overdone in this area YET. Is there demand for 'premium' self storage rather than outdoor shipping containers?

Offices: how do conversion costs compare to residential?

Renewables: we already have a fair sized PV system and the current roof wouldn't be suitable. Will certainly look at biomass etc when we decide what to do but fear I may have missed the boat.

Anyone know any good agents/consultants operating in this area? Not found one yet who I think is really useful.

Not sure where in Essex you are? Are the environs attractive enough to be a wedding venue? I ask because there is a dearth of places for 200+ sized weddings and with that number of ft2 you may be able to make that work.

I have a good friend in Essex who organises weddings and also has a group of suppliers who work together and have a co-showroom. I'd be happy to put you in touch with her if this helps
 

rob1

Member
Location
wiltshire
If you spend your life worrying about paying tax you will never make any money

A tax bill is a nice problem to have, everyone's ambition should be to pay as much tax as possible even if that does sound a bit wrong !!!
Paying income tax is very different to paying IHT, so I have two off farm houses that all income and costs go through an independant account and seven small business units /storage that goes through the trading account but make up around 30% of my business income,the advice I have had is that this % will be accepted as valid as BPR/APR for IHT purposes so no tax would be payable by my kids, if this yard was valued as a trading estate and just an investment and thus no relief available then my kids could be looking at a IHT bill of pushing 7 figures.
 

Clive

Staff Member
Arable Farmer
Location
Lichfield
Paying income tax is very different to paying IHT, so I have two off farm houses that all income and costs go through an independant account and seven small business units /storage that goes through the trading account but make up around 30% of my business income,the advice I have had is that this % will be accepted as valid as BPR/APR for IHT purposes so no tax would be payable by my kids, if this yard was valued as a trading estate and just an investment and thus no relief available then my kids could be looking at a IHT bill of pushing 7 figures.

I understand the scenario fully and it's a familiar problem

However I also see how restricted many business become when they let minimising tax become the tail that wags the dog
 

Lawless

Member
@rob1 is the 30% a % of tunover or net profit?
Also you are hoping to get either BPR or APR on the rental properties that you only receive a rent on and don't actually run any of your own businesses from?
 

Lawless

Member
@Y Fan Wen business rates are a real grey area. There are thresholds that kick in where by below a certain rate you pay nothing and then over and above a certain rateable value you are then in the lap of the gods. They are negotiable from what we have found and will depend on who turns up on the day to rate them and how they feel!
I think currently if a building has a rateable value below £6000 then no rate are applicable - however I think this is up for review in the spring.
 

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