5000sq ft barn, what shall do with it?

rob1

Member
Location
wiltshire
@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?
Turnover, all the income and expenses from the small units on the farm go through the business accounts whereas the two houses have a totally seperate one. As far as IHT reliefs I have been told (by a big ag tax advisory firm) as long as I run the business as I have described then I will get relief, of course rules can change and I am looking at ways of passing on some assets in the next few years while maintaining a decent income but protecting the assets from any matromonial issues fromthe next generation
 

IEM

Member
Location
Essex
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.

Could certainly make it higher spec and subdivide into 2/3 units and let for industrial/storage no bother. This is the base level easy option but keen to do something a bit more involved/unusual that will bring in a higher income. If I'm not confident of doing that I'll certainly be improving the buildings and letting to higher paying tenants.
 

IEM

Member
Location
Essex
Kids play barn if there are not loads of competition locally ?

Money trees !
Interesting thought. We took our 2 to a play barn at the weekend, 30 min drive to a location more rural than ours in a barn half the size. Reckon turnover £12 per adult and there would have been over 100 there. Wife reckons its busier during the week and lots of adding eg people paying to use it for classes etc. Not much overheads: 3 kitchen staff were only employees.
No way I would run that myself though, would have a nervous breakdown in a week, all those kids! Would have to be with a 3rd party!
 

IEM

Member
Location
Essex
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

Thanks JP we are in a reasonably nice part of Essex yes. If we pursue the wedding venue idea if be grateful of the contact certainly.
 

D14

Member
Interesting thought. We took our 2 to a play barn at the weekend, 30 min drive to a location more rural than ours in a barn half the size. Reckon turnover £12 per adult and there would have been over 100 there. Wife reckons its busier during the week and lots of adding eg people paying to use it for classes etc. Not much overheads: 3 kitchen staff were only employees.
No way I would run that myself though, would have a nervous breakdown in a week, all those kids! Would have to be with a 3rd party!

A friend of a friend runs a indoor play centre much like you describe. What turned out quite small scale 5 years ago its now a bit of a monster. He and his wife when they set it up also had 4 'pound land' type shops in local towns which they have since leased out as the play barn has completely taken over their time. They run it themselves so they don't have to employ any managerial type people so they share the management of it which includes all the office work as well as one of them being on site at all times its open. This has meant all staff members are on the basic lowest pay grade and he tends to use younger staff out of uni who will work there while they are trying to get on the career ladder somewhere else. Tested the marriage a bit but they are through it and now sailing along nicely. Not to long ago he said that for every hour its open the turnover is £500/hour and he is open 10-6 seven days per week. He also said that their monitoring system shows them that there is always generally 40 people in if the doors are open with maximum capacity being 150 heads at any one time. People generally do not stay any longer that 1.5 hours. It was a very interesting conversation as he clearly knew what he was doing with it after jumping in at the deep end.
They started doing parties and built two large party rooms but this is run through a separate company so I have no idea what that adds to the bottom line other than my daughter had a party there when it first opened and I think it was around £10/head for entrance and then food afterwards.
They have also very cleverly added a burger and ice cream van that is branded the same as the play barn so they tend now to be at any event where children will be such as village fete's, school fund raisers. I even was at a 70th birthday party last summer and the birthday boy had paid them to turn up with he ice cream van for half an hour so all the guest could get a 99 and flake.
 
soft play - sends shivers - you need to love children and all the chavs that come with them. So glad my boys have grown out of this stage. Insurance has to be huge, hygiene, H&S, claims, outbreaks of xyz, Ecommerce, staff - oh god so reliable. I'm not taken in its that good. Day after day of children running amok. Would need daily scrutiny - 7 days a week. Therefore it would be your baby 10 - 6 7 days a week end of.
 

Andrew K

Member
Arable Farmer
Location
Essex
Interesting thought. We took our 2 to a play barn at the weekend, 30 min drive to a location more rural than ours in a barn half the size. Reckon turnover £12 per adult and there would have been over 100 there. Wife reckons its busier during the week and lots of adding eg people paying to use it for classes etc. Not much overheads: 3 kitchen staff were only employees.
No way I would run that myself though, would have a nervous breakdown in a week, all those kids! Would have to be with a 3rd party!
Ian,
would say your storage rates are on the low side for Essex, we dont go below £5 per sq ft here.
 

IEM

Member
Location
Essex
Ian,
would say your storage rates are on the low side for Essex, we dont go below £5 per sq ft here.

Isn't TFF great, I can post on here and ask all sorts of questions without worrying about half the farmers in the district knowing what I'm up to!(y)

It's a good point and probably our best option is to get some better paying tenants. I don't mind putting some time into doing something else if it will pay but I'd rather be farming than anything else so my heart won't really be in it.
 

IEM

Member
Location
Essex
Have solved this question by healthy rent increases all round on our let buildings (some still shy of your £5 @Andrew K but getting closer) Will carry on as we are for the next couple of years and think about more profitable options that I would actually enjoy being involved with.
 

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