Hi,
I am now looking at investing in a leasehold hostel. Is there a rule of thumb for deciding how much the business is worth ?? The current owner says 4 x annual net earnings.
I will not actually own anything but am buying his business. The books show a good return but notice alot of the income is cash.
By the figures he is presenting me with show a yield of 17%
Any pointers would be much appreciated....
I am now looking at investing in a leasehold hostel. Is there a rule of thumb for deciding how much the business is worth ?? The current owner says 4 x annual net earnings.
I will not actually own anything but am buying his business. The books show a good return but notice alot of the income is cash.
By the figures he is presenting me with show a yield of 17%
Any pointers would be much appreciated....
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