Buying business

I'm interested in buying business, I see there are freehold and leasehold businesses. Is it a good idea to buy leasehold? As I understand I will have to pay rent to the owner and on top of that rent for the premises, will I get any money out of it or will this become a money pit?
-@leavemealone

Buying Freehold is always the best option.

@leavemealone  it really all depends on the location, which area are you thinking about?

@leavemealone

Do you really want to buy a business? Or are you thinking that buying a business is a route to residence?

In the former case, I'd suggest there's no point in buying anything until you have your Spanish residence sorted out, and you're here to look at the business. And in the latter case, I think there are easier ways to get residence than buying a biz.

Separately, I think there might be some confusion about a "freehold" vs a "leasehold" business. Usually, businesses are sold outright, and the freehold/leasehold applies to the business premises (e.g. shop, salon) used by the business. There are good businesses and bad businesses, but this depends on the potential ROI (Return On Investment) rather than whether or not it has leased premises. The lease has a monthly cost (so your expenses are higher), but you're not buying the building (so your up-front cost is lower).

No I have EU residence, this one business I was looking at for instance was manufacturing and it was on rented premises so it was confusing to me why is it leasehold as I thought I'd buying it outright only noticed that it is a leasehold later. Seems like bit of a scam because I'd have to pay two rents, one to the owner and the other for the building.

@leavemealone

If you have EU residence, congrats! It's one less thing to worry about. :-)

I haven't seen your business offer, but it sounds like what I described in my earlier post. The business (a manufacturing biz) is for sale. But the business does not own its own premises (it holds a lease, and pays rent). It's not a "scam" to rent your premises, many businesses do this. So you buy the business from the business owner, for X euros. Usually, this is an outright sale, and you don't pay a second rent to the former owner.

However, you don't want to buy a business, and then be out on the street the next day! So you would need to make sure that the business has an appropriate lease for the next Y years, at the rent of Z euros per month/year. Y and Z need to be acceptable to you as the buyer and manager of the business. While it's possible the business owner is also the property owner (but keeping the property), it's usually a separate property owner. This lease payment is the only rent you would pay. (A "lease" is just a term for a rental contract, but for a guaranteed period of time, so you have the assurance of continuity for your business premises. Hence, "leasehold" business.)

A manufacturing biz that owned its own factory would be more expensive up-front as you have to buy BOTH the business and the building. Whereas the manufacturing biz alone would be much cheaper... but you'd have higher monthly expenses because of the lease payment for the factory.

I see thanks well I think I will look for freehold unless it was a hotel where it would make sense because building would cost too much to pay upfront but I don't want that kind of business.

So this business was really a freehold, there was rent for the premises in the industrial park so I guess it depends how some interpret it.