Hotel Property for Sale: How Much Is My Hotel Worth?
Find out how the value of your hotel property for sale is assessed.
With the economy finally on the climb again, it has become a better time than any to find yourself in the hotel industry. If you are considering adding your own hotel property for sale to the bulk of the online listings, you must first determine how much your property is worth. A hotel broker can help you find these answers, but it’s always beneficial to have an understanding of the process, and how the assessment is made.
The Basics of Assessment
Just like any real estate, there are a few different ways to determine the value of your hotel property for sale. With each method, there are a number of moving variables which could project different assessments, depending on the evaluation tool you use. Sometimes it can be handy to have a second opinion if you have the funds to do so.
The first method of assessment is called the Cost Approach, and it involves the calculation of the market value of your land, as well as the cost of the building itself. The building cost is the price you would pay to replace the building. Subtracted from this number is any depreciation which is observed during the initial review of the property. The final number, following these calculations, is the evaluation of your hotel property for sale.
Although the Cost Approach is used by many real estate owners, the most effective and commonly used method for hotel evaluation is called the Income Approach. This approach determines the worth of your business based solely on its reported performance. This includes annual income, as well as comparable trends in the hotel market.
Factors Reviewed in Your Hotel Property for Sale
During the evaluation, many different aspects of your property will be reviewed. Here at Southeast International Hotel Brokers, we have narrowed down a list of some of these factors, so you have a better idea of what your evaluation will offer. Just a few of these factors include:
- Historical and current income and operating statistics
- Franchise status
- Interior/exterior corridor
- Age and condition of property
- Location
If you have questions or concerns regarding the evaluation process of a hotel property for sale, or you are simply looking for a hotel brokerage that will help you find success in your sale or acquisition, call Southeast International Hotel Brokers today.