Charging by number of occupants implies charging by occupancy also, a minefield grey area of legal argument and interpretation, as some people's lifestyle and career involves travelling for lengthy periods. 

I would instal metering immediately and pass on all legally allowable costs thereafter to the tenant.
The water usage would drop immediately, funny that eh,  that would be the tenants' cost saving,  and water costs would never be your problem again, and surely (?) any costs you can't recoup from tenants are tax deductible and / or depreciable. 

Cheers
thecrest 

When considering location, think of towns that are not only a "through"  town, but a "destination" town as well. That means guests stay longer, and you get those passing through as well. Wagga, Cootamundra, Young, Cowra, Parkes, Orange, all strong  motel towns.
Life is tough enough, why buy in a marginal area, struggle for years, and then wonder why there are no buyers when you want to exit ?
A great position in a weak town is not a great position.
Buy in strong "sponge" towns, not the weaker ones being drained by stronger ones nearby. (google town growth stats by Bernard Salt of KPMG).
Choose carefully.
Cheers
thecrest

Hi all
Anyone interested in motel leasing, and needs a plain english lease, PM send me your email address and I'll send you one. Make sure your email system can handle one attachment of about 35 pages of text.
Cheers
thecrest

Hi Mike
Once you have the rent level set right, you should be competitive at least.
Suggestions
 Offer one week's free rent, becomes an incentive, a point of difference, better to drop a week and get a tenant than lose another week and still have no tenant. Always subject to successful application process as usual though.
If your agency agreement is exclusive, all you can do is place private ads to see who comes out of the woodwork, and then route their application through the REA for professional vetting and ongoing management as per your agreement.
Don't accept applicants who avoid agents for obvious reasons.
Make sure there are plenty of pics on the net ad.
Stipulate that the REA must advise you of every enquiry as it happens, so you can count them.
Consider allowing pets with damage restitution clauses in the lease of course.
Is the house competitive in the area of heating n cooling e.g. evaporative cooling system or r/c aircon ?
 If the property is not well heated or cooled, I'd suggest you fix it, long term benefits and extra depreciation.
Ensure it's priced with properties which have similar features and extras.
Good luck
Cheers
thecrest

Hi Riviana
You're blessed having parents in the business because you know their info is accurate. Vendors info requires due diligence.
Add backs are sometimes a contentious issue and opinion varies on the validity of some categories of addbacks, so when you say the motel netts an extra $50K after addbacks, you would no doubt be looking very carefully to see if the motel would operate under your management in that manner and without those expenses. The true nett under your management depends entirely on how you would operate the motel, so remember to spreadsheet the motel scenario under your management and see what it earns, then you'll know what it's worth to you. Tell me the addbacks and $ and I can venture an opinion if you like.
The figures you have mentioned can be checked by your accountant, and also utilities costs can be checked by getting a history dump from the gas & elec & water suppliers. Same with any suppliers, with the vendor's approval naturally.
Monthly costs of utilities, labour costs, wotif commission and chain costs, occupancy and sales should follow each other very closely across an annual graph to help to verify income claims.
Large regional Vic city / town, good choice, remembering you will do best with a place which is a "destination" town as well as a "through" town, not just one or the other, so don't buy where a town bypass is imminent until about 3 years after, when the damage has passed and the figures have recovered to an assessable level.
Motel B & B (no restaurant) near 2 restaurants, ideal. Restaurants in motels are usually poor performers, extra 40 hrs per week work, useful for selling rooms of course but the same can be done by actively selling the proximity of one or several restaurants nearby in the same way, but without the hassle of staffing, funding and operating them. But your continued good fortune depends on ensuring the restaurant continues to operate, so pump your people through it. 

Recently refurbished ? – Excellent, someone else has done the work for you and their sales graph should show the time frame when it was done by showing a slump while the rooms were off line being refurbished. Also gives some extra depreciation.
Lease period. The industry's opinion is it's easier to sell a motel leasehold with 25-30 years on the lease than 22.  Your parents are right. So it would help if the vendor could confirm in writing the landlord's agreement to alter the lease accordingly and at what cost, payable when, but better as an option that you can action later, or pay annually or when you sell, so you have the benefit of the funds in the meantime, and can sell with 24 or 25 years on it. You need to consider your exit strategy before entry.
Business structure – see your accountant, too many personal situation type variables. Ensure that your financier will lend to the same extent to whatever structure you favour. Some financiers deals vary with the structure. Also please note, there are
Finance Brokers on this website with thousands of postings to their credit who have been helping people and this forum for years and can assist with finance and structure information.

Long winded, sorry, but the points you asked are very important and you're obviously tracking very well.
If you want to send (email through PM page on this site) me some nameless but detailed info on the motel you're welcome. I bet my opinion won't vary from your parents opinion, the figures will tell them the same story because they're in the business and they'll know.

Let me know if I can be of more assistance.
Cheers
thecrest

Do a SWOT analysis on each – see what it tells you.
Cheers
thecrest

I would hate to see "Singapore style" high density means tested "Centrelink Towers" unit blocks, ghettos n gangs no thank you.

OK guys, as an economist I make a great motelier, so I'm punching above my weight here, but i feel a pause or plateau in price growth is more likely than a major correction, and should achieve the same result but more slowly and with less collateral damage.

What do you think ?

Cheers
thecrest

Hi Marmel
Tenants en masse are a mixed lot.
But the best ones are attracted to ads using words and phrases like 
"immaculate" , and
"scrupulously clean"  and
"would suit fastidious house-proud tenant" .
 
It would be in your interest to make the house fit that description.
It is your opportunity to setup a win-win situation.

The property and tenant usually become a match.
It's like Karma really.

Cheers
thecrest

Hi Steve.
Unlike the US situation where many Americans had "walk away" mortgages and the Banks copped heaps of "jingle mail",  Australians are and feel accountable for their housing debt, even when values fall, a bit like "for richer for poorer" , and they'll back it with continued hard work to dig it out of a hole.  They know the values will return. This refers to the majority of good solid Australians, the backbone of our country and national character, and excludes the slick types who file for bankruptcy.

USA went out on a limb and when the cracks started, no one was accountable or held firm, and with a walk away mortgage they didn't  have to hold anything. It's not bankruptcy for them.

Cheers
thecrest