I have a property purchasing question that I have not been able to resolve. I could keep the description short and stick to just the numbers, but there are some non math factors that are part of the value. I will try to keep this as succinct as possible.
1. I currently run my business from my home. Live/work space. I own my place. Expenses are low. If i move away or retire, rentable for $3,000ish a month. Any future rental not possible if business is located at current location.
2. A second property one block away has become available. Purchase price would be about $425,000, rent could be about $3,000ish. This could be a rental (especially to one of my most important employees, which would in turn make it much more likely that I could retain this employee indefinitely and eventually sell the company off to him as I transition to retirement). I could also potentially use it as a business location to run my business from, or both rent it to my employee and have him run the business from the second property...
Although I am in a very expensive area of the country and the price is probably about fair market value and on the rise, $425,000 purchase seems like a premium price, considering the rental amount it would get (the other forums suggest the 1% rental-purchase rule).
The value of keeping the employee is immeasurable, as he would be a fantastic person to transition into partnership and allow me to:
Years 1-4 not work as much (several months off per year),
Years 4-8 then not much (check in on things, semi - retire?),
Years 8-12 and eventually, not at all (hands off, passive business income)...
Any ideas about balancing cost / value / risk, or even completely new suggestions about how to sell a company vs bring in a partner are welcome.