A Complete Guide For Motel Business Property Buyers

A Complete Guide For Motel Business Property Buyers When you are looking to buy motels for sale, it is important to do your due diligence. Not all businesses are worth what the seller is asking for so it is important that you know what to look for in a motel and understand how it should be priced. You should go into the transaction knowing the difference between an okay opportunity and a great opportunity and what is in your bank account.

Know the difference between a hotel and a motel A lot of people use the terms motel and hotel interchangeably. While they are both businesses operating with the same concept, providing overnight accommodation, there is a difference between the two. You should have a proper understanding of the differentiating factors between the two. You should look at the location to try and understand the difference.

Motels are typically located within a few miles of highway access locations or located along highways. On the other hand, hotels are found near tourist destinations, attractions and other points of interest. You should also look at the amenities that the establishment offers guests. Motels offer fewer amenities compared to hotels. Motels give their guests access to cable, food and other basics while hotels provide every amenity possible. Most motels do not have pools, business centers, fitness centers or other options you can find in most hotels.

Know what customers want

When doing your due diligence, it is important to examine the motel you want to buy from a commercial real estate app. Before you make your interest clearly known, it is important to schedule an overnight stay at the motel you are considering to see the kind of service you get. Motels that offer bad customer service have very uncomfortable accommodations and will not do well unless you do a complete business overhaul. While you are at the motel, you should check on the quality of the motel. Check whether it is clean and organized. The next thing you should look at is the furniture in the room, the décor and linens. Determine if it is in good condition or outdated. Lastly, you should take a walk around the motel and see what you can find. You should look for things that would need maintenance and repair. Doing secret shopping will help you find out if the motel has what customers look for and if you will have to do a lot of work improving the quality of the motel.

Get a good price It is becoming a buyer’s market when it comes to motels. A lot of motels suffered declining profits with the recent economic meltdown. If you are a buyer, it is a good thing because motel prices are dropping.

When it comes to the price of buying motels for sale, there are several ways to get a good price. You will need to know the value per room, the cap rate percentage, multiple of room revenue, economic value and multiple of total revenue. Use these figures to determine the value of the motel by choosing the desired app rate or per room rate.