selling motel rooms questions?

[james_w]

Hi,

Lately we have been looking to buy freehold motels and I had a thought

you could get a better motel by selling off the rooms however I have no idea

if this is even possible and what sort of returns investors would look for

was thinking 8-11% so has anyone done this before if so what type of returns

would you sell or buy on?

thanx

James

 

[GIDDO]

Hello James,

I have a block of units that is leased out as a motel (short stay units).

I imagine you would need to be able to strata title them if you wanted to sell them and then lease them back individually. I could do that, but mine is leased as a block.

I know some big hotels sell their rooms separately to investors and then lease them back again, but I guess they would have special "hotel" zoning to do this.

I think your council zoning would have a lot to do with what you could achieve.

Maybe have a look at some motel real estate agent sites and look for investment motels. I think you are right they generally sell for about 9-11% return.