To guesstimate the income you need to make some provisos. so thinking to buy motel?
So, if the investment of 1 Million in Motel & that the $1m motel is a freehold, in reasonable condition, say 3 1/2 stars at least, running strong around 60-65% occupancy, with no restaurant, then it should return approx 15% ROI(Return on Investment) to an owner operator , meaning around $150K after all expenses.
That’s the industry expectation for Ontario motels.
In City returns are lower due to increased competition and higher land costs, so same motel in city area returns around 10%.
Normally 25 – 30 year Leaseholds show higher returns than freehold, but it’s all location Location…location.
We like big towns above 20,000 populations on major country or queen hwy intersections in min 4 directions and or linking to cities road highways around.
The location really matters of course and the accommodation “product” needs to be tailored to the local market and then maintained and presented well by very welcoming hosts and marketed strongly by internet. They’re complicated in the fine tuning the business and investment but those are the basics now days.
They can be a good investment and can be run under your management, which is also a part of business plan.
We are Very happy to help anyone considering this area of investment, as many people have invested in this sector and gain their financial freedom . . . .