If you’re thinking of investing in a motel, it’s important to make sure you have motel business accounting professionals on your team. There are a lot of tax issues that can crop up when it comes to investing in a motel, so you need trusted motel accountants to keep you well advised. When it comes to investing in a motel, here are three crucial questions you need to ask:
What is the Past Performance Like?
In the case of motels, past performance can predict future performance to a large extent. Do you have the hard facts on the motel’s performance, like the amount of nights each room is booked for during the year? This is an important metric to take heed of, as it points to the health of the business. If the business is nose diving, you’ll need to do something considerably different than the current owners to improve the situation. What improvements could you possibly make that will help turn a profit? Your motel accountants can help you to assess the merits of any motel investment opportunity before you get in too deep. But usually facts don’t lie, so if the numbers point to a distinct lack of profit, you may want to take your investing capital elsewhere. Again, ask professionals in motel business accounting to take a look over the facts and give you their verdict before making any hasty decisions.
What Condition is the Motel In?
This is a crucial question, because it determines how much money you’ll need to pump into the project before you see any ROI. Before taking on a renovator’s dream, you should run it by your Clayton accountants to get a more grounded viewpoint. It can be very easy to fall in love with a business premises or idea without first checking in with your tax agents in Clayton to get their professional opinion. Make sure you take into account whether the motel you’re thinking of buying is good to go and make a profit with right away, or if it’s more of a fixer-upper. Let your motel accountants crunch the numbers to find out when you can expect to make some money from your investment. They may also be able to help you work out what expenses will be tax deductible. Keep an ongoing dialogue open with your motel business accounting team so you can keep on top of different ways to make the most of your tax, from purchase and expenses to any tax involved when selling.
Is There Much Competition Nearby?
Competition could be a good thing or a bad thing, depending on how much of it there is close to your motel purchase. You need to have a good look around the area and find out exactly how much direct and indirect competition is already there. If there’s a lot of competition, do you know how your motel will stand a chance when compared to all the options available? Maybe you’ll need to find a point of difference – such as live music, or a bistro area. You just can’t do the same thing as everyone else on the block because you won’t stand out enough, and there won’t be a compelling reason for customers to choose your business over others. Standing out is key to running a successful motel.