Australia has the hottest property market in the Asia-Pacific at the moment. Compared with other nations in the G20, the Land Down Under fares really well in terms of investments in both residential and commercial properties. News like this compels more people to put their money in real estate.
But whilst getting started in real estate investments is pretty easy, it can be quite tricky to choose the right property to buy. The adage “location, location, location” is not enough to tell new investors if they are making the right decisions.
It gets trickier with a commercial property, especially when it comes to motels. Some can’t help but ask, is it wise to invest in motels? For the real estate experts at ResortBrokers.com.au, the answer is yes – and there are many reasons to justify this.
Of course, the first reason is because of the high ROI of this type of property. With a motel, it is fairly easy to recoup the investment and earn a profit. The best part is owners do not even need to have an active hand in managing the property. With the existence of management rights, owners can simply buy the property and let someone else do the managing.
Increasing Land Value
Almost all the time, motel locations are busy, crowded places. Moreover, motels often come with large blocks of freehold land. With these two in the equation, it is clear that the land values of motels increase over time, which means more returns to the investor.
Financial experts agree that motels are low risk investments, because occupancy is almost never an issue. In a country where tourism is in demand, motels become highly profitable business ventures. Even if some lessees don’t renew their contracts, the tenants just come pouring in. For motels, there is always a market to cater to.
Unlike bonds and stocks, real estate is a tangible investment. Owners hold the property and the title, so it’s a good way to diversify a portfolio.
Perhaps this is the greatest benefit of motels as a passive investment: tax benefits. New buildings and those who underwent renovations have high amounts of allowable write-offs. Although the actual deductions would vary per property, the taxation benefits are good enough for motel owners.
Motels are definitely worth their price, especially as a form of passive investment. For those who plan on venturing into real estate, consider motels as one of the viable options.