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When the average person thinks about real estate investment, their minds inevitably wander toward one of two images. Real estate investment must be focused on either a tidy suburban home complete with shutters on the windows, or a towering urban high rise where young professionals scuttle about and where promising businesses cluster.
The world of real estate investment is so much broader than these two images. Fledgling investors can take control of industrial warehouses, for example, or stretches of land that may prove worthy of development. An alternative opportunity for real estate investment is event spaces. Event spaces can prove extremely profitable for motivated and savvy investors.
Before we get started, if you are ready to dive into the world of event space investing, click the link below to book a free strategy call to explore your financing options today.
What are event spaces?
In the simplest terms, event spaces are the places where events are held. But that wildly vague definition is perfect when discussing a real estate space that can change drastically depending on its purpose.
You don’t have to drop millions on a sprawling convention center to stake your claim in the market. Modern event spaces run the gamut from rooftop gardens to historic mansions, restored theatres to yachts. Easily the most alluring aspect of event spaces investing is the opportunity to get creative with your location and visual aesthetic.
While creativity is important, the type of property will impact the types of events held there. Corporate event spaces will want to develop a space with a more professional vibe. Wedding event spaces should embrace the idea of nature and romance. Party event spaces should be comfortable – and readily equipped for a liquor license. Or, you can try for a little bit of everything. The joy of investing in event spaces is the capacity for creativity in the market.
Despite the broad potential, venues present their challenges and may not be for every investor.
Research Doesn’t Cost You Anything
Before you consider investing in an event venue, it’s important to first research the even industry. Start by researching several event planning trade organizations to determine which issues are most discussed by venue owners. This will also give you an idea as to the width and breadth of the event industry.
Political and social trends impact the event industry from moment-to-moment. As a result, you’ll have to learn to identify these trends as they happen and anticipate their impact on the event industry.
Then, you’ll need to research the requirements for setting up a new business. Activities include acquiring a liquor license, determining the regulations for using the space and evaluating fire codes, noise ordinances and event parking requirements.
The point is to make sure that you’re fully aware of the requirements for operating an event venue and the challenges facing the industry. Don’t rush the research. Successful investors understand both real estate and the industry they’re leasing to.
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Event industry experience is a must
If you have no experience working in the event industry, the first thing to do is find someone who does and avail yourself of their expertise. Nothing compares to the real-life experience when it comes to understanding the nuance of the industry itself.
Those with experience in a given event sector can help you identify potential competitors, point to popular trends and highlight areas for improvement. You can’t put a price tag on that kind of insight when you’re hoping to capture a portion of the event venue profits in a given city.
Deep pockets are always a plus
Unless you’re taking over a venue that’s already successful, the initial investment in your event venue will likely be sizable. Regardless of where you choose to set up, you’ll undoubtedly need to invest in renovations.
Then, you’ll need to furnish the space with furniture, AV equipment and ad signage (and that’s just the tip of the iceberg). Once you have your materials, you’re going to need a team of talented people to operate it and serve your clients. After the event has concluded, you’ll need to pay to have it cleaned, as well.
Then there are the regular monthly expenses like the venue’s rent or mortgage (depending on whether or not your buying or leasing), the monthly marketing budget to help get the word out about your venue. You’ll also need to pay basic utilities.
Finally, most experts recommend having between six and 12 months of operating expenses on hand at any moment, just in case. In short, be prepared to put forward a sizable amount of money before you begin to see profits of any kind.
Make marketing a priority
It’s impossible to overstate the importance of correctly marketing your event venue. Hours of strategy go into a successful marketing campaign in the run-up to an event’s opening, hours that most investors won’t have as they oversee the final preparations for opening day. Unless you have professional training with modern marketing techniques, it’s best to put your venue’s publicity in the hands of seasoned pros.
Several marketing companies will claim to have the know-how to represent you and your event. Then, they’ll outline a plan that focuses on social media and not much else. Don’t buy that. Be sure to choose a company with a track record for successfully promoting and representing event spaces. Companies with experience focused on venues will understand the importance of taking steps that go beyond a simple Twitter or Facebook campaign.
The perfect industry for partnerships
Perhaps more than any other sector of real estate investment, putting your time and money into an event venue is ideal for an investor in search of a partner. Whether you’re pooling collective assets or collective knowledge, investing in an event venue is an industry built for people who want to play as part of a team rather than going solo.
Given the challenges unique to the event industry, it’s unlikely that one person possesses the capital required as well as the ability to see the sector from both a bird’s eye view and on the ground. As such, entering the market with an adequate support structure is as vital as entering with all your research completed.
So, if you are ready to dive into the world of event space investing, click the link below to book a free strategy call to explore your financing options today.