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Updated over 5 years ago on . Most recent reply

Patrick Sears's profile image
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Patrick Sears
  • from Midlothian, Virginia
  • Member since Nov 17, 2013
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Patrick Sears's profile image
Patrick Sears's profile image
Patrick Sears
  • from Midlothian, Virginia
  • Member since Nov 17, 2013
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Patrick Sears
  • Midlothian, VA
17
Votes |
130
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Commercial Real Estate Investing

Hotel cap rates

Patrick Sears
  • Midlothian, VA
Posted

Hello,

I am becoming interested in possibly investing in hotels/motels in the future.  I have been reading that the mid to higher-level properties are valued on cap rates just like apartments.  I have seen a few on LoopNet that have caps in the 7 range. 

My question is, why would I pay that kind of a valuation for a full-time business that requires a ton of daily work when I can get an apartment for about the same rate without the full-time business headaches?

Thanks!

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Account Closed's profile image
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Account Closed
  • Investor
  • from Honolulu, Hawaii
  • Member since Nov 18, 2013
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Account Closed
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  • from Honolulu, Hawaii
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Account Closed
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  • Honolulu, HI
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Account Closed
  • Investor
  • Honolulu, HI
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There are two aspects to this.  One is the real estate and the other is the hotel operations.  They are best valued seperately.

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