Forum Replies Created
Hi Rusty.
You’re on the right track Rusty. Lets get the terminology listed first.
Freehold Motel – no lease exists. Could be owner operated or under management.
Motel Investment – the landlord’s interest in the lease (land, building). Income is the rent from a lessee/tenant, who operates the motel or employs a manager.
You can buy a freehold motel and draft up a lease and sell it, leaving you with the investment, so you’re the landlord receiving rent from the tenant/lessee operating the motel.
If you buy a “freehold” with a lease in place, you’re actually buying an investment, and the tenant is already in place and the lease is already operating. You are buying the lease as is.
As an example, take an average country motel around 20 units no restaurant, linen outsourced. Managers cost say $65K.
Freehold ROI – 15% less $65K for managers.
Leasehold ROI – 30% less $65K for managers.
Combo – Purchase freehold 2 brm units nearby, furnish and provide them to motel guests. The $ tariff charged p.w. is about triple what you get from a permanent tenant. Your combo idea is good.
Remember to factor in your interest costs.
The towns you mentioned are strong. I have motel ownership experience in 2 of them.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Centrelink – Monaro Shire – the Snowy area perhaps ?
Unfortunately sometimes its a case of " Only our taxes at work. "
The old Jewish saying " feed 'em, clothe 'em, house 'em " was meant to refer to
business security, not social security.
But no objection to helping those in genuine need.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Greed and need motivates people to work and be industrious.
Capitalism addresses the need to exchange that work for income.
Systems fall apart eventually without strict control.
People rebel eventually against oppression.
So perhaps we should be looking for a capitalistic democracy run by a benign dictator or sovereign with no Centrelink.
Googling it now.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Growing illegal dope in your property shows a complete disregard for everyone. Not much point discussing your feelings with someone who doesn't care. Take photos, get witnesses to inspect, call the police and send him on his way immediately.
Time to take out the trash.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Technology For Motels.
Looking at the recent developments in technology, I suggest to anyone considering buying a motel to engage the services of an IT expert to assess the business from that perspective in order to estimate the costs of making any necessary improvements and gaining some upside for the business e.g.
current website
booking engines
channel manager
reservation system with backup & UPS
wireless internet access for guests with gateway & control system
office wireless internet access
optimum business phone/internet/mobiles bundled plan from Telstra
Change lights to LED to reduce elec bill by about 35%. (just changed our own motel lights).
Anyone else changed to all LED ?
They make awesome LED floodlights too.
Reduction in costs adds to nett profit which adds to
asset value of the business and
repeat nett income and
borrowing power.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
My eyeballs are rotating like scott no mates' logo looking at this triplicated post, extra coupla clicks there maybe.
cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Not too old, obviously strategies change with life expectancy and investment preferences and goals.
You're in the right place here.
Some experts on the forum have been here a long time and have many posts to their credit, been helping forum members extensively.
Always nice to see new members doing an intro so we can get to know them.
good luck
cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Horses for courses and personal tastes and different tools for different jobs.
cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
an apple a day keeps the android away
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Are you still seeking hotels?
Can you give us some feedback on your search so far .?
Might help some forum members here.
cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
How does this investment perform in recessive periods?
Do customers treat it like discretionary spending and pull out have garage sales, or repack more tightly and downsize or close altogether ?
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
How much cost to fix the switch is preventing you from operating your business ?
Compare this to how much you think you are losing per week.
Remember, it's hard in most cases to prove the actual $ extent of loss without long term historic figures.
How can you prove exactly how many customers would've walked in your door and how much they would've spent if it's a new business ? So perhaps if it's affordable, you should mitigate the loss, pay for the switch to be repaired, and get on with your business. Then perhaps you could show what your loss was while recouping the repair cost from the real estate and have some income do it with. .
Good luck, hope it's a great success.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Agree with Terry about will complications, personally experienced this with a parent and the beneficiaries, even the antagonistic ones, couldn't wait to mutually agree to dissolve the "tenants in common" aspect of the funds dispersal.
Get full legal explanation from your solicitor before going anywhere near it, especially implications for probate. I have no expertise in this area, only a single sad experience.
May all yours be happy ones.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Congrats Ben. Thanks for sharing the good news, when someone'sw walking on water coz it's all falling into place, we all get a boost of the enthusiasm n energy right off the page.
Another prime example of "the harder you work the luckier you get".
That's what makes it fall into place. You deserve it.
Congrats again.
cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Thanks Ephraem1.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi abcd1.
Sorry i seem to have overlooked your post too, maybe my email alerts aren't always working.
30% would be the smallest deposit I've heard of, and you'd need to have a lot to offer the bank or lender.
A lot has to be just right before you can operate on the extreme edge of anything, especially borrowing.
You'd need to get an expert in finance to help you on this one.
There are a few on the forum who have many posts to their credit showing long standing assistance to forum members.
Perhaps you should be asking them about finance in this instance.
Too close to the edge for me to know.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Suggest you get the ones onboard who are willing or for whom weekly rent really suits, before offering incentives.
The Residential Tenancies Act states that rent must be in advance at all times, but you can't default a tenant on rent until the sun sets on an unpaid day.
Also, they can pay you anyway they want, weekly, daily, fortnightly or every 13.5 days if they want, as long as there are no arrears, they have satisfied the Act.
However,, you can make set arrangements before starting a tenancy as part of your agreement, but remember some landlord wishes are not enforceable.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Garmon.
Suggest you be more more wary with Real Estate agents, perhaps you've found the best one in Australia and think they're all like that. Just be careful OK coz they have quite a reputation.
Lose the rose coloured glasses before you get involved with Real Estate Agents.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Harv.
Thought I'd answered you but can't see it here. Sorry if I missed it.
I assume you mean you're the buyer not seller.
More years is a negotiated deal, and benchmarks are very dubious.
Anything can be negotiated, especially this one.
Read the lease thoroughly, examine exactly everything the lessor is obliged to do, like repairs, maintenence, replacements, and check the motel condition so you have some idea what that will mean for the lessor's costs.
You may be able to trade some of his future costs for more lease years, so you take the costs, he gives the years..
If not, at least pay as you go so you don't have all the costs up front.
Could be in the form of extra rent (might save on stamp duty) but reducing back to normal rent after payment completed.
Some landlords seem to think $5K per year is a popular figure.
You could purchase or otherwise negotiate a written option to have more years, without actually taking them until you decide to sell.
Hope that helps.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Suggest installing the items immediately and giving notice for the rent increase to cover it.
There is no mention of the tenant being disagreeable with a rent increase.
I would advise the tenant that the property was offered at a low rent without a heater. Adding the heater would cost $15 p.w. extra rent. Let me know what you'd like to do. Get the tenant on a lease or he'll might leave with the warm weather.
Cheers.
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
