If you plan to buy a hotel, do these things first.

For better or worse, the decision to own a business is a life-changing one. Deciding to buy a hotel is no different. All too often, would-be entrepreneurs rush into a commercial investment without exercising the necessary attention to detail. This lack of diligence can turn a potentially lucrative property into a nightmarish money pit. Before you sign on the dotted line, consider this advice from Southeast International Hotel Brokers.

Consult the Experts Before You Buy a Hotel

Buying a hotel can be a complex, arduous process, even if you’re not completely new to the industry. Keep the lines of communication open between you and your prospective seller. Discuss past successes and challenges. Did anything surprise him or her about the hospitality industry? Don’t be afraid to reach out to other hotel owners to get their input. And don’t forget to recruit the help of a hotel broker to get more information about the buying process.

Buy a Hotel: Business Plan Basics

Make your business plan compelling. Thorough income projections and market research are important, but don’t bore your potential investors to tears either. Your mission statement should grab their attention immediately, summarizing the unique value of your hotel concept in a single sentence. Next, clearly identify short and long-term goals for your business, and use the subsequent sections of the plan to provide information pertinent to these goals. An impressive business plan is a must for raising the capital necessary to buy a hotel. Take the process seriously, and don’t take shortcuts.

Buy a Hotel in a Profitable Location

Whether you’re looking to own a boutique hotel or a recognizable brand, location plays a significant role in attracting customers. Entertainment venues and tourist attractions might make a metropolitan location seem the most promising, but the competition in these areas is fierce. Buying a hotel that offers convenient access to an airport, public transportation, restaurants and entertainment destinations is ideal, but you will have to come up with innovative ways of differentiating your business from the other lodging options in the vicinity.

A rural location often means fewer competitors, but establishing your business along a well-traveled corridor with desirable amenities nearby is still recommended for attaining the highest occupancy rates. Initial start-up costs are likely to be lower, however, and you will probably encounter fewer headaches during the permitting process in a more rural community.

Understand the Consumer Before You Buy a Hotel

Gaining familiarity with your target clientele is another key factor. Of course, this will be addressed in your business plan, but it should be an ongoing priority as you continue through the process of buying a hotel. Where are your potential guests coming from, and what are they looking for in a place of lodging? How do you plan on winning their repeat business? These are just a few of the questions you should ask yourself.

Understand the Market Before You Buy a Hotel

Awareness of the market is a predictor of success in the hospitality industry. As a prospective hotel owner, keeping up with business-for-sale trends in your area is crucial. You don’t have to be an expert economist, but having knowledge of the industry climate will help you make an informed purchase. Market conditions largely dictate the degree of leverage you will have in negotiations to buy a hotel, so it’s a good idea to be familiar with them. Southeast International Hotel Brokers has more than 50 years of experience in the hotel brokerage industry and we make it a priority to stay on top of the market trends to best assist our buyers and sellers. Partner with us to find the best location for your hotel and business plan.

The initial investment of time and money is substantial, but the decision to buy a hotel can be a lucrative and rewarding one. Paying attention to these basic factors will help get your new business venture started on the right foot. For additional information, contact Southeast International Hotel Brokers today.