How to Choose the Right Motel to Invest In


Investing in a good motel is a sound financial idea for several reasons. Motels make great investments because:

  • People will always travel and they always need a place to stay;
  • The hospitality industry is resilient;
  • It can be very easy to network with important business figures when you are part of a successful motel.

When looking for motels for sale, how do you choose the right motel to invest in?

Well, there are a few characteristics you should look for in a motel that will let you know if you will make a profit on your investment, or take a loss.

Understand What You Are Buying

Hotels and motels are two similar businesses, but they have very different purposes. A hotel is designed for long-term accommodations and, in some cases, those accommodations can be luxurious.

A motel is a business that is found along a major route that is used by travelers as a place to stay during their travelers.

In other words, a hotel is usually a destination, while a motel is a layover point.

Reputation Is Important

Motels do not get rated by travel magazines or websites with stars, like hotels do. When you see ratings on motels, they are generally done by people who have stayed at the motel.

That means that reputation is everything the motel business and you want to invest your money in a motel with a strong reputation.

Location Is Critical

Since travelers do not generally plan ahead to stay in a motel, the location of your motel is extremely important to your success. A motel that is worth investing in will be located along a major travel route and be easily accessible to traffic.

Most successful motels can be found just off the exit ramps of highways and long, connecting roads. A motel that is not visible from a major travel route is going to have difficulty showing a sustainable profit.

Consider The Need For Upgrades

As we mentioned, motels get a good portion of their business from word of mouth or published referrals from past guests.

If the motel you are looking at investing in has the reputation for having dirty linens and cracked walls, then you cannot ignore that when determining whether or not to make your investment.

If you find a motel that is in a prime location but has a poor reputation for quality, then you need to consider whether or not you want to invest in upgrading the facility. Some of the necessary upgrades would be:

  • Clean bedding;
  • New rugs in the rooms;
  • An inviting lobby and check-in area;
  • New covering for the room walls.

Know What Kind Of Customers You Want To Deal With

Motels are traditionally not luxury accommodations for travelers, but some motels do install luxuries to attract certain types of clients.

For example, a motel that is trying to attract traveling families may have a pool and game room installed. Motels that want to attract traveling business professionals may install a restaurant and Internet service.

If you intend to invest in a motel, then make sure that the motel’s business model lines up with your vision. A motel that is geared towards attracting families may have a difficult time attracting the business crowd.

Remember that, unlike a hotel, your motel serves a very specific purpose and it needs to be designed to offer what your target audience wants, often at the expense of other types of clients.

Motels Are a Smart Investment

Investing in a motel, especially in a bad economy, is an excellent idea. When the economy recovers, and it will, travelers will hit the roads with a vengeance and your motel will be there to benefit from the resurgence in travel.

You just need to be sure that the motel you are investing in has all of the necessary features and amenities you are looking for in a business of this type.