What You Need to Know Before You Buy a Hotel for the First Time

The first time you peruse the hotel listings after deciding to buy a hotel can be exciting indeed! But what sort of homework should you do to ensure your hotel purchase is successful AND satisfying?

Setting Your Parameters

You’ve been working in the hotel industry for a decade, and now it is time to act on that constant thought, “When I have my own hotel, I will … “  One of the first parameters to determine is what sort of hotel ownership lifestyle you are seeking. Satisfaction within your hotel ownership lifestyle will directly impact your daily happiness. Are you looking for a fast-paced, busy property with significant activity, or a more laid back, casual small hotel or inn? Consider this before you buy a hotel.

Thinking through this issue carefully is one of the key decisions for a first-time hotel buyer, and geographic location plays a central role in the decision to buy a hotel. The water? The mountains? Big city or small town? Only you can determine what type of hotel ownership lifestyle will bring you maximum personal satisfaction.

Secondly, consider your financial capabilities when you decide to buy a hotel. Accurately determining the amount of money you can pull together for a down payment, as well as for operating costs and capital improvements during the first year, is key. Financing can come from many sources – financial institutions, your own savings, and retirement (consider the penalties for withdrawal), family members or friends who are willing to invest with you, or even seller financing.

As you prepare to buy a hotel, knowing what your exact financial situation is, and not over-extending yourself, will give you peace of mind as you proceed through the hotel sales process. After all, owning a hotel is a business decision that one makes to gain profit.

As You Buy A Hotel

Now that you’ve determined the size and type of hotel property you want to purchase, you will have a multitude of hotel listings from which to choose. A good hotel brokerage firm, like Southeast International, can help you sort through those hotel listings to find the ones that meet your personal criteria and filter out those that do not, thereby saving you time and money.

In narrowing down your hotel listing options, remember to check each hotel’s metrics, including financial statements, occupancy rates, room rates, taxes, amenities, and look at market demand as well as the general economic growth of the area. An experienced hotel brokerage firm can help a first-time hotel buyer understand these financial and economic factors. Not taking the time to thoroughly check a property’s financials and metrics could spell disaster for the first time hotel investor!

At Southeast International Hotel Brokers, we provide the expertise and support a first-time hotel buyer needs to understand the burgeoning hotel industry and to find the perfect property for your new and satisfying lifestyle when you buy a hotel.