Is it Worth Buying a Cafe in Sydney Under $400,000?

Is it Worth Buying a Cafe in Sydney Under $400,000?

Australians love their coffee! The birth of this coffee-centric culture can be dated back to the 1950s with the high influx of European immigrants, who brought with them a multitude of culinary delights, with coffee proving to be one of the most popular. Whilst coffee is said to have landed in Sydney in 1788 on ships, it wasnt until the 50s and 60s when Italians brought espresso machines that the love for coffee really took off. 

Currently there are over 630 cafes on the market in Sydney with the average price of a business in Sydney at $530,000, there a numerous Cafe options under this mark, with the nation-wide average of Cafe's at $370,000. So yes, there are options. The next step is figuring out if it is worth it?

With a recent SMH article titled; Coffee After Dark, it goes to show that coffee isnt just that morning hit,  with Sydney siders looking for social outlets that dont revolve around pubs and beer gardens. 

So with a strong coffee scene in Sydney is it actually a good idea to buy one? After all there are over 600+ for sale, and thousands in operation. We take a look at what to look out for when buying a cafe. 

 

What Makes a Cafe Profitable?

Well a profitable cafe will make you money, is the simplest answer. 

You want to look at the net takings for the business, and decide how much money the business owner is actually taking home. The business takings, or gross profits, are not always a good indicator. Cafes are notorious for having high leases and staff expenses, so you need to know, as the business owner what you will actually be taking home. When reviewing the documents you should play close attention to:

1. Net Profits - what is going in the business owners profits. Make sure you look at tax returns and bank statements. 
2. Lease agreements - what are the terms, options to renew
3. Supplier contracts - what is the buying options for the cafe - how do they source produce and what % is it of the expenses?
4. Wage agreements - with wage increases on the rise, you need to know how much money is going to staff

You want to make sure you understand your ROI and how long it will take you to recoup the costs in buying the cafe. $400,000 doesnt buy you much in Sydney - you cant even buy an apartment. So obtaining a business for under $400,000 you need to know what it is going to get you. Its always advised to have a professional help you review a cafe you are buying to make sure its a good choice.
 

What are the Benefits of Buying an Existing Cafe?
 

• Financial History - When you look to buy an already existing cafe for sale, you will be able to take a look at the financials of the business. You will have a better overview of the profits and losses and associated costs in running the cafe, rather than pieces of a puzzle that you will have to put together as you go. If you're paying $400,000, you get to see how much you will earn and establish your ROI. You can predict your income. 
   
• Income Ready - When buying a cafe, you can be making money as soon as you take possession, there is no downtime for setup and building a client base. Staff have been hired, equipment is up and running - there is no wait time for business to take off.
   
• Ability to expand - Is the cafe you're buying running to its full potential? You can consider putting some time and effort into expanding the menu or goods and services offered to include dine-in or alfresco dining.
   
• Set and forget options - If you're looking to buy a business with minimal effort from an owner, you may want to consider buying a cafe for sale that is run under management. The staff have been running for some time, so you can rest easy knowing your asset is run with people with experience.
   
• Rebates and Grants - Consider looking into the grants and rebates available for established businesses in your state. For example, there is an Product Stewardship for Oil Program in NSW that provides NSW small and medium food and beverage businesses with rebates when using recycled oil or recycling the oil they use.
   
• Implement AI technology - Alot of cafes that exist today havent embraced AI technologies. With education you can learn about the current AI tools available for cafes and implement them to increase the customer experience and profitability of the business. 

 

What does $400,000 Price Tag Actually Mean?

 

When a cafe is priced at $400,000, it represents the seller’s asking price for the business. Just like real estate, this figure isn’t a guaranteed value but rather what the seller (and often their broker) believe the cafe is worth, based on financial performance, location, fit-out, and comparable sales in the market.

That price usually covers the goodwill, plant and equipment, and fixtures and fittings of the cafe. In other words, you’re buying the established customer base, reputation, and the physical assets such as the coffee machines, furniture, kitchen equipment, and POS systems. It typically does not include stock (like coffee beans and food inventory), which is often charged separately at settlement.

The number itself is often based on a multiple of profit. For example, if the cafe is generating around $200,000 in adjusted net profit (or “owner’s earnings”), a $400,000 asking price would reflect a multiple of 2x annual profit. In hospitality, these multiples usually fall somewhere between one to three times profit, depending on the cafe’s stability, lease, and location.

It’s also important to note that unless the sale is specifically listed as freehold, that $400,000 is for the business only and not the building it operates from. In Sydney, you would be looking well over $400,000 to purchase a freehold cafe, commercial property in Sydney is expensive! The lease terms, including rent, length, and options, play a critical role in supporting the business’s value.

So, in practical terms, a cafe priced at $400,000 means you’re buying the right to take over the operation, the brand reputation, the equipment, and the lease. The price is typically grounded in how much profit the business generates for an owner each year, giving buyers an idea of the potential return on investment.

 

Check out these Cafes in Sydney Under $400,000..

 

1. Beautiful Harbourside Cafe Gem For Sale

• Location: Sydney, NSW
• Price: $299,000 Negotiable
• Details: High-end cafe with a modern $1M+ fit-out, outdoor dining near Sydney Harbour, long lease and liquor license, currently under management.
• View Details

 

 

 

2. Corporate Cafe in Prime Parramatta Location – 5 Days Only

• Location: Parramatta, NSW
• Price: $349,000
• Details: Established cafe with $12,000 weekly takings, low rent of $1,400/week, 100+ seats, and weekday-only hours offering strong profits and work-life balance.
• View Details
   

3. North Shore Train Line Cafe – $18k Weekly, 36kg Coffee

• Location: South Turramurra, NSW
• Price: $219,000 + SAV
• Details: Well-known cafe on the Upper North Shore with $18,235 weekly sales, 36kg coffee, low rent, and strong local following, trading just 6 days a week.
• View Details
   

4. Profitable Cafe with Low Rent & Secure Lease

• Location: Paddington, NSW
• Price: $159,999
• Details: High-exposure cafe with $6,000 weekly takings, long 10+ year lease, low rent of $891/week, indoor & outdoor seating, and potential to expand hours.
• View Details
   

5. Cafe Takeaway – Netting Over $5,500 Weekly

• Location: Inner West, NSW
• Price: $387,000
• Details: Busy cafe with 38kg coffee per week, netting $5,500+, low rent, long lease to 2026 with 3+3 option, and prime position near Metro station.
• View Details
   

6. Cafe Opportunity with Long Lease

• Location: Parramatta, NSW
• Price: $139,000
• Details: Modern 140sqm cafe with seating for 70, 10-year lease, short trading hours under management, and excellent growth potential in a prime location.
• View Details
   

7. Cafe Kiosk in Inner West Shopping Centre

• Location: Inner West, NSW
• Price: $249,000
• Details: Kiosk-style cafe with 17kg coffee weekly, netting over $3,000, 7-year lease, short hours, 20 seats, and prime position in front of major supermarket.
• View Details

 

 

8. Well-Loved Cafe with $1.3M+ Annual Sales

• Location: Sydney, NSW
• Price: $395,000 + SAV
• Details: Thriving cafe with $1.3M+ turnover, prime street-front position in major shopping precinct, fully fitted kitchen, 5+ years established, and loyal customer base.
• View Details
   

9. Profitable Inner West Cafe – 27kg Coffee, $197k Net Profit

• Location: Concord West, NSW
• Price: $220,000 + SAV
• Details: Long-established café of 17 years with $728k turnover, $197k net profit, 27kg coffee weekly, low rent of $1,141, and secure lease to 2029 with option.
• View Details
   

10. Corporate Cafe – 5 Days Only, $4k+ Weekly Profit

• Location: Frenchs Forest, NSW
• Price: $$399,000 + SAV
• Details: Corporate cafe in premium commercial building with $16.5k weekly sales, $4,107 net profit, 20kg coffee, no competition, and Monday–Friday trading only for work-life balance.
• View Details
   

11. Waterfront Cafe - Long Lease

• Location: Woolloomooloo, NSW
• Price: $80,000 + Stock
• Details: Affordable cafe with new fit-out, simple menu, low rent of $3,400/month, 33.8sqm space, and steady foot traffic near Sydney CBD.
• View Details
   

12. Gloria Jeans Franchise – Under Management

• Location: Western Sydney, NSW
• Price: $195,000 + SAV
• Details: Established 21 years with $770,000 annual sales, strong shopping centre location, lease to 2030, trained staff in place, and franchise support included.
• View Details

So How do you Know if it is Worth Buying?

Do your research!

Every business is different and there is no blanketed rule as to which one is better. You need to look at each cafe independently and decide if it is giving you the expected ROI and if you can see it being profitable into the future. In Sydney the location, lease agreements and staff are big components of owning a cafe, so factor these into your due dilligence process. A cafe's reputation is also important, so check online reviews and see what the community feels about the business. 

 

Originally published 2020. Updated 2025

Tags: nsw sydney buying listicle cafe

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