Hotels provide higher, more predictable, and lower-risk returns on your investment.
Reason 1
A hotel is a combination of real estate and a business. Since hotels charge by the day it can vary its room rate based on demand and supply. The combination of the two result in higher revenue per square foot compared with other income properties.
Reason 2
A Franchised hotel like Marriott, Hilton, Holiday Inn, etc . had an established GLOBAL customer base. Moreover, it has systematized operations and marketing support. The combination of the two results in predictable revenue and predictable profit.
Reason 3
Due to its higher revenue, hotels can afford truly professional hotel management and staff. Moreover, there’s an ongoing PIP (Property Improvement Plan) required by the franchise which means, the hotel is kept in great condition or institutional grade quality.
CHOOSING PROFITABLE HOTELS
Hotels provide higher, more predictable, and lower-risk returns on your investment.
We choose branded hotels. We like Marriott, Hilton and Hyatt. These brands have a loyal global customer base, great marketing support and best-in-class operational systems. This lowers our operational risk.
We usually do not build from the ground up. Rather, we buy existing hotels & consider its competency vs. new builds. This ensures we can charge daily room rates that is profitable to us & affordable.
Is the hotel near offices, theme parks, big churches, sports stadiums, universities and tourist attractions? By choosing the right location with enough demand drivers, we lower our vacancy risk.
We only choose hotel projects where we can create substantial increase in value through improved operations, & investing in a comprehensive PIP (Property Improvement Plan). This increases the value of our properties significantly lowering our disposition risk.
We underwrite hotels conservatively and only acquire properties we can buy at substantially below market value. This gives us a good margin of safety to factor in cap rate decompressions or adverse economic corrections like a recession.
We can buy hotels all over the country given our scale of operations. Our hotel operator partner company has over $1.5 BILLION of hotels with 1700 employees. We can also renovate properties cheaper than other operators given our vertical integration.
Begin your investment journey with Clark Wise INC today. Our expertise in multifamily and hotel investments ensures that your hard-earned money is working efficiently to build a robust investment portfolio.
