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Buying A Motel

Buying A Motel

| by Melanie Winter

Purchasing a motel involves a lifestyle change.  What are some of the things you should consider if you are thinking of buying a motel?

One of the first obvious decisions to be made when venturing into this vibrant industry is location.  How far away from your current residence do you want to move?  Whilst many larger motels can be run under management, most small to medium size businesses involve hands-on running of the motel.  It helps that most motels include a residence; this also adds to the all up profitability of the venture.  

The next consideration is leasehold or freehold?  Most motel sales are on a leasehold basis.  New motel leases are normally for a longer term than most other business types and range from 20 years to 30 year terms.  The amount of rent is governed by turnover, location and quality of the motel property.

Another decision to be made is, do I want a motel that includes a restaurant?  In some cases, a restaurant is an imperative part of the business and without one, the business would not sustain its turnover and, subsequently, its profitability.  The operation of a restaurant greatly increases the workload by extending the working day.  In many cases, the operating restaurant is not overly profitable and unless you are experienced or keen to run your own restaurant business within a business I would suggest a motel without a restaurant is a better option.  That been said, most larger motel purchases will include a restaurant.

A motel purchase involves a lifestyle and location change; however, by living on the premises the cost savings are substantial making a motel purchase both a rewarding and profitable experience.