Investing in a hotel or motel in a country town

Hotels and motels can be a great investment as long as you choose the right purchase, providing both an ongoing income stream and the potential for capital growth. Here are some tips to help you choose a great motel investment. 

Diverse income streams

Ideally, your hotel should have multiple streams of income, including money from food and beverage sales, functions and accommodation. In recent years, many rural towns benefited from the mining boom for example, with the majority of their income coming from mining company employees who stay at the hotel and use the motels restaurants and cafes. Now the boom is starting to taper off the local businesses such as motels are not looking as profitable.  It's a good idea to spend some time researching the sources of income for your motel, as you can find that your motel suddenly starts losing money if a local mine or processing site suddenly shuts down, or lays off a large portion of their staff. 

Local competition

In a small town, your motel may not have many direct competitors, but the rise of room sharing sites has placed a lot of pressure on local motels. It's worth checking out all of the options for people to stay, eat and hold functions locally to determine if you need to improve your service offerings to stay competitive. That way you can include the need to refit kitchens, refurbish bedrooms or improve the function rooms into your costs when you compare available properties in different areas. 

Quality staff and service

One of the best ways to ensure regular income in a small town is through quality service and happy staff. These can be hard to gauge from a flyer so it's worth taking a trip to the motels that you are deciding between to get an idea of their staff quality and how the service compares to other motels. Not only does this help you to compare motels in their current state, but it can also help to identify whether you can make some simple improvements by automating the customer management system or having an improvement mechanism for getting customer feedback. 

Choosing a high quality and high potential motel can be a great way to secure your future financial custody. By comparing your options both with other properties for sale and the competitors in the areas you can find a great property that has the best chance of earning you maximum returns on your investment. 


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