– What to Look for in an Accommodation Property –
When it comes to investing in accommodation properties, there are as many investment options as there are property types.
Knowing about the different types of accommodation properties enables investors to create a self-sustaining business that will provide profits for years to come.
Knowing the basic history and some of the benefits and drawbacks of each property type will also help investors make an informed decision when buying.
Motels
Motels became a very popular investment in the 1960s as the development of the highway system made long-distance travel more common and accessible to the general public.
The intention of motels was to cater to the traveling public but that began to change with advancements in mass transportation.
Many savvy investors converted former motels into apartments for monthly or long-term rentals, while others purchased run-down and even abandoned properties for their future development potential. Nonfranchised motels have made a strong comeback in some states as fully restored historical attractions or vintage operations.
One of the earliest motel chains was established in the 1930s.
Hotels
In contrast to motels, which were designed to cater to the traveling public heading from one place to another, hotels cater to a broader spectrum. Furthermore, hotels tend to operate as franchises or chains.
Buying into a hotel chain comes with the advantage of brand recognition, which is reflected in the purchase price.
Be sure to read the franchise agreement carefully and fully understand your legal obligations to the brand.
Conference Centers
Conference centers are a type of hotel designed to accommodate very large groups with a presentation area, sleeping accommodations, dining opportunities, recreation and even shopping amenities.
The sheer volume of guests who attend various conferences requires careful management to balance the expense of staffing with the potential for profit.
Extended-stay Hotels
Extended-stay hotels are designed to accommodate guests who require longer-term lodging.
The benefit of investing in an extended-stay hotel is that daily room cleaning and laundering service is not required.
Owners offer a reduced rate based on the length of stay in exchange for a regular laundering service determined by the property owner.
Bed-and-Breakfasts
Bed-and-breakfasts require a lot more than financial backing. You are also investing in a lifestyle. Guests expect a more intimate and personable experience.
Washroom facilities are often shared, and guests typically dine at the “family” table with the owners, exchanging stories and experiences.
Some bed-and-breakfasts have successfully created a niche market by tapping into the romanticism of a bygone era and offer honeymoon and anniversary themes.
Contact a Commercial Real Estate Expert today:
Luke LeGrand, ePRO 210-843-5853
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Picture Credit: Flickr
