Interested in buying a motel/backbackers

Hi all, just curious about instead of buying another property purchasing a motel/backpackers, id say buying the business, the property itself i would rent, i have seen a few that you own the property so would prefer that but some of the returns im seeing on owning a motel are huge.

Has anyone had experience with this & would this be a good move to add to a portfolio, great cash returns and for 500-800k plenty of ones for sale, same as a property instead your getting 10-20k a week income, ofcourse the outgoings are a fair bit but can definitely do well.

Any ones personal experiences with this would be great thanks all & have a good weekend

 

I mean the returns are probably proportionate to the risk and hassles involved though?

I've looked into it on and off over the years, and my assessment has been that it's a pretty tough gig.

 

Oh really, maybe it is then, i know theres times when they are not busy i heard but didnt know they were risky

 

Best off buying the building then instead of the business

 

You won’t be buying a property you’ll be buying a business and all the stresses that come with it.

 

The small motel complex I used to stay at port stephens has been flat chat since Covid started. I estimate he’s pulling in 1500 a night.

Prior to Covid he was barely getting by.

 

Yeah the returns you can get on them are crazy, a old friend of mine owns a backpackers in darwin it hits 97% capacity during the dry season but gets quiet during the wet season,

its something id consider doing but seems its best to have access to a fair bit of cash for when it gets quiet

 

Glad I found this as there are very limited threads on this type prop!

Has anyone looked into the Freehold Motel as passive Investment ?

 

I do know one of the original Somersoft members bought somewhere like that some 20 years ago to
run it as a business .
It didn’t turn out to be what he hoped for and was trying to unload it a few years later .

If you work within the industry and know what you’re in for , might work , but haven’t met anyone who’s bought into hospitality as an investment where it’s worked ,
And over the years I’ve met a few

 

Thanks @See Change and @The Y-man

Based 9n my limited research including discussions with few people running this gig, alot of investors have jumped into it due to lucrative rental deals and ofcourse risks are there hence industry knowledge is imp yet not essential!

I am giving myself atleast 6 to 8 months to do deep dive Re Leasehold, Greehold, and Hoing Concerm scensrios as next year our serviceability will improve potentially (havent checked this in commercial stage nut we do mot want cross collatrel with our resi portfolio).