Convenience store pros and cons

[Ben Lin]

Hello BP,

I am looking to purchase a duplex. First floor is a fully occupied convenience store and the second floor is a 2 bedroom apartment unit. This is going to be my first time owning a commercial unit in a big city. 

What are the pros and cons owning a duplex with a convenience store on the first floor? Do you think I need to up my insurance to protect myself because of the store? The cross street is pretty busy and I think around 500 people visit the store each day.  

I think rental income is very good but are there potential pitfalls that I don’t know? 

Any advice is appreciated. 

[Carini Rochester]

Safe to assume the store is a tenant and not a business you would run? I would feel very comfortable about this if you could verify the lease terms for the store and assurance that the store's business is stable and likely to continue to rent this location in the future. Many commercial leases are for 5 or 7 or 10 years with annual or bi-annual rent increases written into the lease. Your insurer (I hope) will advise you wisely about your policy and $ amounts.