You might already be familiar with the financial benefits of hotel ownership, especially when it’s located in a busy business or tourist district. Undoubtedly, buying motels for sale by owner can be an excellent investment. Nevertheless, even though investing in this amazing industry can be a truly smart idea, not all motels or hotels are worth the money. If you have been contemplating the buying of any motel business, this article offers a few tips to consider.
1. The devil is in the details
Purchasing a motel that is for sale by owner means that you could get a better deal than you might have gotten when you use a business broker. Just make sure that you fine-tune your negotiation skills and also learn as much as possible about the concerned property as well as the reason for which the owner wants to sell it. The more the details you have while going in, the surer you will be of paying the appropriate price.
2. Who owned it?
Make sure that you get access to all of the most recent reports from your area’s Department of Health, and guests’ recent reviews and comments about the motel. Before purchasing any motel, you might want to undertake a thorough inspection of the commercial property. Ask to be shown the utility bills from the past couple of years and find out the kind of income to realistically expect from the property. If you are searching for a property via a commercial real estate app, check to see whether some of this information is offered in the property listing. Don’t buy into any franchise that doesn’t feature an excellent local reputation as frequently, the ‘now under new management’ sign is just not enough.
3. Who runs it?
Running an excellent motel is a 24/7 business and needs experienced and reliable staff. This comprises the retention of the best maintenance staff, desk clerks, as well as chambermaids. Spend a bit of time discussing the operations of the motel with the present managers and owner, and learn about the most pressing everyday staffing challenges.
4. Who is your competition?
Determine how any updates to the property and its furnishings could impact its reputation, and how this could eventually translate into better profits with time. Take a close look at other similar motels within the area and find out what they could be doing to win guests away as the competition.
5. What is happening in the area?
Before you buy any motel, check with your county or state planning office to see whether there is any major construction project that’s set to start in the area, and also if any alterations would be made to traffic patterns surrounding the property. If so, the property might then not be worth as much with time. Similarly, if new, modern shopping centers or attractions are popping up, then it’s excellent to buy the property now before its value rises.
Purchasing motels for sale by owner can be an excellent investment, but only if you understand precisely what you are getting yourself into. These listed factors are only the few that primarily influence your buying decision for commercial real estate properties.
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