Tips & FAQs for Buying a Hotel
Buy a Hotel – Tips & FAQs
Before making the decision to buy a hotel, it’s natural to have quite a few questions – especially if this is your first time investing in a hotel property. Here at Southeast International Hotel Brokers, we have assisted many buyers secure the acquisition of hotel properties, and we want to help you too.
With more than a half century of experience in hotel sales, you can be assured that you are working with a highly qualified hotel brokerage. Our well-rounded staff of hotel brokers, accounting personnel and legal professionals are personable and dependable, and we will walk you through each step of the hotel buying process to ensure your experience is as efficient and easy as possible.
Many potential buyers come to us with similar questions about the hotel buying process. Our goal here is to address those common questions, and provide the necessary educational information so that you can feel comfortable making informed decisions. Of course, we are always available to answer any additional questions you may have.
Before you finalize your decision to buy a hotel, please review our list of frequently asked questions below.
1. How much of a down payment will I need to buy a hotel?
To buy a hotel, we recommend buyers have the available funds to cover 20-25% of the hotel’s purchase price. To learn more about hotel down payments, click here.
2. Do I need to have operating experience?
While not always necessary, operating experience is definitely preferred to secure the financing to buy a hotel. You may also consider hiring an asset management company to manage your hotel for you. If you do choose to go that route, be aware that there will be management fees involved, so you’ll need to make sure the profit margin of your hotel can support that. To learn more about the experience necessary to buy a hotel, click here.
3. What affects the price of a hotel?
To determine the sale price of a hotel, you must consider several different factors that will affect the price of a hotel. The main factors that determine the price and overall value of a hotel are:
- Property condition
- Market saturation
To read more about hotel pricing factors, click here.
4. Can I get seller financing or a lease/purchase option?
Although some sellers may consider carrying a small portion of the hotel’s purchase price, very few sellers will consider a lease/purchase agreement. Most buyers get financing from a conventional lender.