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Home Studio - Financial Questions

Member for

2 years 11 months
I'm thinking about turning my basement into a recording studio. My friend is an audio engineer, and I'm a musician. He can supply the recording gear and do the recording, and I can supply the instruments and act as a session musician. My thoughts so far in terms of how money would be split are as follows:

- He pays me monthly rent for the space
- He keeps the profit from each session, minus whatever he'd pay me for session work.

Assuming this sounds about right, my main question is, how much do I charge for rent, and how much does he pay me for session work?

I'm assuming he'll know what to charge customers for recording sessions, but any tips on how to establish that would also be appreciated.
I read that $26 is a rough average for what a studio musician makes. As far as renting a commercial space, I haven't the slightest clue.

I tried looking this stuff up, and all I could find was adds for furnished studios for rent, and tips on how to get your home studio set up gear-wise, none of which is what I need to know.

Any advice whatsoever (including recommended sources - books, sites, etc.) would be much appreciated, since I'm quite ignorant on the subject. Thanks!

Comments

Member for

8 years 6 months

pcrecord Mon, 10/15/2018 - 12:48
So you want to rent not only a space but instruments. You first should establish who maintain the instruments. strings, drum heads etc.. can cost you after a while.
As for the session musician, you should charge to the customer directly. Your friend propose you to them and they decide. Charge by the hour, 20-25-30$ depending on the value and how many you want to do.
How much should you charge for rent... Well remember he has to make money, so it could be half or a third of what he makes an hour. It all depends on how much the investment each of you are making. You could charge nothing to him but charge the customer and give him a salary.. no ?

At the end friend businesses are risky, even more then a recording studio itself for that mather.
Take your time to think and brainstorm with your friend, make sure you will still be friend if this doesn't work.. ;)

Member for

12 years 1 month

kmetal Mon, 10/15/2018 - 16:39
When I worked at a commercial studio I got $15/hr studio got 50/hr, and they equipped it, and paid for maintenance. I would do maintenance labor myself if I could. I built the place for the owner, so I had free access to the studio during downtime.

You also have to consider load in time for the band, equipment issues, cancelled sessions, overtime.

15-30$ is a fair rate for studio musician work around here south of boston.

I'll end by saying this is a bad idea. Music is a horrible buisness to plan on making profit, it's designed around being poor but loving your work. It's a break even buisness.

My advice, split everything down the middle.

It also depends on if you build I or studio, and he has pro gear, as it's 30k easy for a small basement build.

Member for

2 years 11 months

OHS Mon, 10/15/2018 - 17:21
pcrecord: That's true, he'd technically be renting a studio furnished with instruments - so maybe it would make more sense to split his profits half way, rather than him paying 1/3 for the space? And if I were to charge him nothing, but rather pay him, what would I pay him? How much does one pay an audio engineer who provides his own equipment? I feel like that's an obscure precedent...

kmetal: Yeah, it's by no means a get rich scheme. More a way of setting myself up to have a little extra income and make music a bigger part of my life. Our basement is already set up as our rehearsal studio, and I have some minimal (very minimal) recording gear, so it's just a matter of him moving his gear (pro gear) in and working out of there. The benefit for me is extra income, exposure to recording arts, and also easy access for making our own recordings. The benefit for him would be that he doesn't pay monthly rent, so he's not under pressure to make a certain amount each month.

What I'm still wondering is whether charging him half or a third of what he makes is going to be better or worse for him than if he were to rent a commercial space. Does anyone know the average costs of renting studio-sized commercial buildings? And is it safe to assume that the hourly cost of a studio = the engineer's salary?

Member for

12 years 1 month

kmetal Mon, 10/15/2018 - 17:37
Comercial studios around Boston / Providence, are usually $40-80/hr, and include a staffer or assistant. Usually a cheif engineer/producer would be 15-40/hr on top of that.

In your case if band pays 30/hr, the studio would get 10, engineer 20, since it's his gear. Id say that's fair.

Otherwise he could rent a full zcess rehearsal space for a couple hundred a month just about anywhere.

Studio rates vary quite a bit by location.

Member for

12 years 1 month

kmetal Mon, 10/15/2018 - 18:22
Sounds fair to me.

At Normandy Sound we pay 2k a month for the building, did 100k remodeling, and put 100k into gear. And charge 60-75/hour, staff engineer gets 15/hr of that. senior engineer is optional, and gets 20-35/hr, additional to the 60-75/hr base rate.

You figure in your case, a third for gear, third for labour, third for facility. Three elements, divided equally.

Member for

8 years 9 months

DonnyThompson Tue, 10/16/2018 - 08:10
I would also add that turning your basement into a “studio” is a LOT more involved than simply setting up a computer/DAW in that space.
Things like isolation, acoustic treatment - which may include construction - isn’t cheap, at least not if you’re wanting results that can compete with any sense of quality.
Basements are notorious for presenting very real obstacles for recording:
Furnaces, Dehumidifiers, or AC turning on in the middle of recording...
Moisture can be a serious gear killer, and you don’t need to have water you can actually see for that to be the case...it can also be unhealthy if you put up walls without consideration to the mold that can grow in a damp, dark space that those walls are providing.
Isolation between your recording space and the floor above that space; unless you are planning on serious isolation measures, you could very well have to deal with the sound of people walking around above you...
Having a basement ceiling height that will allow for decent drum OH miking; the general rule of thumb is minimum 8’ in height; any lower than that and you’re risking having the OH mics butting up against the boundary of the floor above you, which can cause sizzle rejections - or to try and counter that by having to set the height of those OH mics too low; which can render the purpose of the OH array to be pointless.

A few more things to consider:
Do you have a separate entrance to your basement? If not, then you are dealing with the possibility of people whom you don’t know, people you’re not sure are trustworthy, walking through your living area; and there could be times where you really don’t want that.
Noise leakage - without serious sound proofing, your neighbors will be able to hear drums, amps, etc. this may or may not be an issue, depending on:
A) your local noise ordinance
B) how cool your neighbors are, and
C) what times of day you can or can’t get away with people being able to hear those instruments being played.
Parking - could also be an issue if you’re recording more than just one or two people.
The rates you are able to (realistically) charge will be determined by most of the above.
And lastly - Partnerships. Friendship is one thing, but things can get a bit dicey when there’s money involved between those friends. Friendships and money aren’t always a good combination.
All that said...
Home studios can be great - when attention is paid to the sound and isolation of that space; and when quality gear is being used.
Many of us here in RO work out of our homes these days, and most of us who do once owned commercial spaces located outside of our homes, and were built as actual studios. I think that most guys here who did, will tell you that those two scenarios are not the same, and that some sacrifices were made to put studios into our homes.
There are upsides and downsides to both.
Depending on how serious you are about it - which is directly related to your asking rate - and what you can realistically expect to make - will determine whether the project is worth it or not. It’s one thing to put a “studio” in your home as a hobby, but another thing entirely when you are running it as a business. ;)
Just realize that there are maybe things ( and hidden costs involved) that you haven’t yet considered.
Good luck. :)
FWIW.

Member for

2 years 11 months

OHS Tue, 10/16/2018 - 08:47
All very good points - thanks!

We'll definitely have him come do some recording for us before we decide whether we want to go ahead and turn it into a commercial space, to give him a chance and see how the space is. I know basement's can have problems, but ours may be exceptional: it's actually a semi basement, carpeted, sort of divided, and with entrance to a second 'real' basement. Either or both could potentially be used. And as far as noise goes, it's quite sound proof - we rehears there regularly and it doesn't bother anyone.

Thanks for the tips. I know there's a lot to consider so I'm trying to get as clear an idea as I can of how it'd go before hand.

Member for

8 years 6 months

pcrecord Tue, 10/16/2018 - 08:49
It sounds like many info may discourage you from going foward.
I think we need to put things in perspective. How pro you want it to be will change many things.
Many musicians ends by building a small place to record at home. If they are able to record a few friends and make a few bucks that's great.
If you are in that set of mind, go ahead and do it the best you can and charge accordingly.
My studio is in my basement and I'm able to do some customers.. but it's not every week that I do.
I charge 30$/hour which includes everything. As I said, most musicians won't come to me to record except the occasionnal newbies and amateurs.
But with that an a few voice over and karaoke like projects, it gives me a bit of money to maintain the place and occasionnaly upgrade gears.
So I started to offer other services, video and photography. I already had a passion for photography so I had the camera.
Nonetheless, lavalier and lighting doesn't come cheap...

My point is, if it's amateur for amateurs. You can have a lot of fun and can grow doing it.

But if you offer a Pro studio services with Pro rates, people will expect a lot from your place and you.
They want want the whole deal like in the movies, big rooms and 48 track neves etc..
You and I know that with just a few highend preamps and good converters we can acheive the same sound if the room isn't too bad.
But when paying 50-80$ an hour, they want the dream of being a superstar !! ;)

Member for

12 years 8 months

dvdhawk Tue, 10/16/2018 - 09:13
All of that is great insight and advice. One more thing I didn’t see mentioned yet, is insurance.

If you have normal homeowner’s insurance it may not payout if you’re running a commercial enterprise. Some folks wouldn’t care, but I would want the extra equipment to be adequately insured. And I would want to be covered if someone got injured or tried to channel Keith Moon while on my property.

Best of luck.

Member for

7 years 7 months

paulears Tue, 10/16/2018 - 11:29
If he's a decent friend, why not just do a proper partnership? I can see all sorts of issue if you start talking about contra invoicing - you invoice him for things he then invoices you? My working partnership with a long term colleague - we used to work together, uses our very different skills sets to a common end, and we simply split the profits equally. It means that sometimes I do a lot of work, for minimal return. On the next project, he might be really busy and again, the split is a bit unbalanced. We get on professionally, but we don't really socialise or have the same circle of friends. Over the course of the year, it works really well. He has a composing studio, providing the basic work, I have a different type of studio - where I can record instruments, vocals add a range of sampled instruments, and do the clever stuff - often with video in the other room. We felt the need to stop itemising what we do and trust each other. We have a very simple agreement. Profit is distributed 50/50. If I choose to spend lots of money on a sample package, he perhaps doesn't (although we do often buy 2 for compatibility) equally when he buys something to make his bit easier or better, it's his money. Neither of us have an interest in the money we sink into equipment, just the profits. We do lots of downloads and we both have access to the PayPal account. We take profits regularly, so if anything did happen to our relationship - it would have minimal impact on the funds in the account.

In your case, I'm not sure if you are proper friends, good colleagues, casual friends or what? Our system works for us, it might be awful for you. Personally, I'd hate to have a studio in my home that belonged and was controlled by somebody else, and I just got to play in it when needed. It could suit you.

My studios are in an extension to my home. I have a combined domestic/business insurance which is affordable, with the usual burglar alarms protecting it. My insurance restricts how many strangers visit - It means that we will never be advertising as a general studio. Our visitors tend to be doing things on our projects, and that means we pay them - so they're considered not to be the public. Our cover works for us. Our local council do not consider us to be commercial premises either, just working from home. Donny's comments from the other side of the water seem very similar to how it is here in the UK.

Member for

12 years 1 month

kmetal Tue, 10/16/2018 - 11:45
Having had a client at tbe commercial studio, both bang whores with no shower or sink in the room and sell drugs mid session, without mentioning it to me, I'm all set with musicians hanging in my place. He was kind enough to not pay be the last $450 he owed, after I gave him monnths of free mix and editing to stick within his budget.

Music people are largley mentally unstable, poor, and buisness ignorant. I should know. I'm a music guy.

Fuck all that. People can send me there work for mixing and eventually tracking online, and I'll work on it from my place remotely.

Most of these scabs out there will do anything for a buck. I'm all set bottom feeding.

I'm not in the mix biz to prioritize creature comforts for strangers.

Member for

7 years 2 months

DogsoverLava Fri, 10/19/2018 - 11:02
What about the question of how many hours a week (or a year) do I need to be billing at full rate to make the studio viable... will this be a hobby or a full time business that is supposed to cover you both?

So you take all your fixed costs (rent, utilities, insurance etc) and your amortized costs of the build-out, and your depreciation costs (amortized) of your gear purchases, and the cost of any money you borrowed (loans) or spent (capital investment) and then factor in your layouts for labour or your draw -- plus some ongoing expenses like maintenance and cleaning, and things like security alarms -- plus all your building/business permits etc.... You should be able to put together a formula that basically says you need to have the studio booked for XXX hours/month to break even.

Member for

2 years 8 months

Tbozaudio Thu, 11/21/2019 - 23:33
DonnyThompson, post: 459436, member: 46114 wrote: I would also add that turning your basement into a “studio” is a LOT more involved than simply setting up a computer/DAW in that space.
Things like isolation, acoustic treatment - which may include construction - isn’t cheap, at least not if you’re wanting results that can compete with any sense of quality.
Basements are notorious for presenting very real obstacles for recording:
Furnaces, Dehumidifiers, or AC turning on in the middle of recording...
Moisture can be a serious gear killer, and you don’t need to have water you can actually see for that to be the case...it can also be unhealthy if you put up walls without consideration to the mold that can grow in a damp, dark space that those walls are providing.
Isolation between your recording space and the floor above that space; unless you are planning on serious isolation measures, you could very well have to deal with the sound of people walking around above you...
Having a basement ceiling height that will allow for decent drum OH miking; the general rule of thumb is minimum 8’ in height; any lower than that and you’re risking having the OH mics butting up against the boundary of the floor above you, which can cause sizzle rejections - or to try and counter that by having to set the height of those OH mics too low; which can render the purpose of the OH array to be pointless.

A few more things to consider:
Do you have a separate entrance to your basement? If not, then you are dealing with the possibility of people whom you don’t know, people you’re not sure are trustworthy, walking through your living area; and there could be times where you really don’t want that.
Noise leakage - without serious sound proofing, your neighbors will be able to hear drums, amps, etc. this may or may not be an issue, depending on:
A) your local noise ordinance
B) how cool your neighbors are, and
C) what times of day you can or can’t get away with people being able to hear those instruments being played.
Parking - could also be an issue if you’re recording more than just one or two people.
The rates you are able to (realistically) charge will be determined by most of the above.
And lastly - Partnerships. Friendship is one thing, but things can get a bit dicey when there’s money involved between those friends. Friendships and money aren’t always a good combination.
All that said...
Home studios can be great - when attention is paid to the sound and isolation of that space; and when quality gear is being used.
Many of us here in RO work out of our homes these days, and most of us who do once owned commercial spaces located outside of our homes, and were built as actual studios. I think that most guys here who did, will tell you that those two scenarios are not the same, and that some sacrifices were made to put studios into our homes.
There are upsides and downsides to both.
Depending on how serious you are about it - which is directly related to your asking rate - and what you can realistically expect to make - will determine whether the project is worth it or not. It’s one thing to put a “studio” in your home as a hobby, but another thing entirely when you are running it as a business. ;)
Just realize that there are maybe things ( and hidden costs involved) that you haven’t yet considered.
Good luck. :)
FWIW.


All great points!!! The big issue or thing to consider is.... does the room produce a desired sound space? If I were an engineer and or producer looking to pay for a space, I would be looking for a tracking room that Sounds great! Just because you have space, doesn’t mean it sounds desirable.

Also, is there an outside entrance? Sounds trivial, but trust me, having strangers trouncing through your place to get to the studio, can be strange. I have a separate outside entrance and bathroom access. Happy I do!

Member for

7 years 7 months

paulears Thu, 02/27/2020 - 04:10
Forgive me, but any link that takes you to the apply now page, rather than the interest, payment terms, protection, background and the all important red tape pages worries me.

Delving a little deeper - their interest rates are what might be probably enough to get them on the danger list here in the UK. What made you do the search? Clearly it's not personal experience as in "I used these people and they're good" but, "for no good reason I searched and randomly popped up on a forum I've been on a very short time, and suggested them" - when we weren't talking about finance - which makes me wonder if you're even a real person. If you are? Care to explain why these people are so good for studio money? Finance companies historically HATE musicians.
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