Motels are a lot of work. Somebody has to make sure all those beds get made every morning. That said they are often quite profitable. Unlike apartments which typically trade at caps of .09 (or if you believe the bulk of the reports around here .05) they typically trade at caps of .16 to .25 however managing one is a full time job.
The key is to keep occupancy up. That means good locations or good marketing or both.
I'd go with a chain...I've appraised alot of Super 8 type properties and alot of mom & pop type of places, the mom and pop type of places are getting murdered in the hospitality busienss right now. The Super 8 types are doing okay, they still make money, and the hospitality market is starting to turn the corner too.
Motels are a lot of work. Somebody has to make sure all those beds get made every morning. That said they are often quite profitable. Unlike apartments which typically trade at caps of .09 (or if you believe the bulk of the reports around here .05) they typically trade at caps of .16 to .25 however managing one is a full time job.
The key is to keep occupancy up. That means good locations or good marketing or both.
I'd go with a chain...I've appraised alot of Super 8 type properties and alot of mom & pop type of places, the mom and pop type of places are getting murdered in the hospitality busienss right now. The Super 8 types are doing okay, they still make money, and the hospitality market is starting to turn the corner too.