Motel leasing

Hi JJMB,
I am a Motel Leasehold owner and happy to answer any questions you may have. I was very raw when I purchased my leasehold, and learn t very quickly by asking other motel owners. You will find other owners are happy to talk to you as they also gain new insights to the way others run their motels.
If you need any experience and willing to travel to Far East Gippsland, we may be able to work something out for you.

You can get alot of info from "thecrest" just click on his posts and read the comments. I am sure you will benefit. He has been a great help to me in the past.

cheers and good luck.
Earlstongardens.

Something else occurred to me, a few motel broker ads mention motel on the market due to poor health.
Now that sounds like there’s someone who could use some help and provide some hands on experience.
Win win.
Cheers
thecresto

Hi xavier1.
Welcome to the forum from me as just one of the many members here.
It might help others to help you if you could list some of your priorities or wish list such as :
Restaurant or not?
Price bracket
residence size required
star rating
holiday or business type motel
are you a couple in this venture
relevant skills

just some outline might help.
cheers
thecrest

Hi Xavier01.
Your skills would add much to a “low tech” motel – one that has been operating without a good website or strong internet presence.
Perfectionism is a hard slave driver but pays big dividends in hospitality, especially in areas of bookings details, repairs and maintenance, and room condition and presentation.
Attention to detail impresses all guests and generates return bookings.

You’re correct about food if you’re not a foodie, let someone else do it, nearby.

Business guests are good bread n butter in between holidays, and they are homing pigeons, they like to keep returning to the same place to stay because it works for them, unlike many holiday guests who will go somewhere else next time for a change. Tourists like new, reps like dependable.
Needs 2 people so you’d have to plan to replace your partner’s partial absence with a casual.
With your skills and background, and provided you engage with people, look after them, and they like you, you have what it takes.

Ensure when you profile a motel that your strengths address it’s weaknesses and vice versa.

Cheers
thecrest

Hi LeanneB.

Busy hwys go east/west, and go north/south. Where they intersect is a good start. The map will tell the story.

Some towns are destination towns if they have enough to offer, some are only through towns because they lack natural or man-made attractions. You can search for those figures from Visitor Information Centres in those locations. Councils and RTA (now RMS) have traffic counts, but getting cooperation from RTA would be doubtful. Also the ABS provides detailed information like Occupancy for towns and regions. Strong businesses need good reasons why they have been strong, and those reasons need to be proven to be enduring. 

Leases are a lengthy subject, they must be well read and fully understood by someone on your team. If it's under 20 years, expect to want to buy more years down the track, and the landlord might say no. Best time to negotiate more years is when buying – the vendor can probably negotiate more years at that time better than you. Very important items in a lease are – who pays for repairs or replacement of what items; how is the rent increased; is the landlord required to rebuild partial or total damage like fire, flood etc; but you MUST get legal advice re leases and buying a lease, be guided by your solicitor.

 We raised 2 kids in hospitality like motels, very challenging, very educational for them. They like being useful, plenty to do. Casual work pays too. SOHO is never easy. It helps if the school bus stop is closeby.

Good luck

Cheers

thecrest 

Hi LeanneB.

Not the norm, and not true. Suggest you deal with someone else.  The terms and conditions of the lease can affect the value of the leasehold so a copy of the lease should be available same time as the P & L's and careful reading and full understanding of the lease forms an important part of your due diligence, so how could any reasonable broker with nothing to hide expect you to make an offer without being given a copy of the lease.?

Some leases are so oppressive and onerous, valuers react negatively to them. Those leases reduce the market price. 

If you are ok with reading legal verbiage for about 35 pages with the lease, then as you read through,  make a list of the following :

what items does the landlord have to pay for to replace or repair; same for the tenant;

how is the rent increase calculated, and graph rent increases out for 5-7 years and see what it amounts to;

in the case of partial or total damage by fire or flood, is the landlord required to rebuild;

how long before the lease expires;

are you held over as a guarantor for the new lessee if you sell the lease in the future (unbelievable but true);

if it's an older motel, who pays if you have to excavate to fix old plumbing or stormwater or wiring (you can't inspect it);

List all the things you have to pay for in the lease, inspect them all to assess their condition and the likelihood of that expense, inspect all the motel for likely expense, and make allowances accordingly in any price discussions, and don't forget the signage which is expensive and makes money or repels guests. Naturally you must get well informed legal advice for yourself and make your own decisions based on your own due diligence. 

Always best to use a specialist in any field if you can find one. Otherwise, use one who is capable and at least has your interests at heart.

Some brokers recommend their own experts, but that seems very close to vested interests to me. Can't see their expert suggesting you don't buy something the broker wants to sell you.

You're blessed with your kids and their background. 

Cheers

thecrest