Seasonal Motel Conversion?

Question

Hello again all,

Looking to jump into bigger multi family. So far we have a couple triplexes, a duplex, and some sfh. Ideally, and where we're at financially, I'm thinking 10-50 units would be a sweet spot where we're not competing with the bigger players, smaller investors, or families looking for homes. I came across a motel in the area that is currently operated only seasonally (mid may-sept). Its just outside a family beach resort and Ive been racking my brain on how I can operate the building either seasonally or short term and still utilize property management without operating as a motel where I have to be available 24/7. There is currently no heat in the rooms and the water line runs on the outside of the building which is why I assume they are seasonal in addition to the travelers to the area all summer. Anyone have any experience in something similar or ideas to buy and operate the 15 rooms without needing to change zoning from commercial or selling rooms by the night? Thanks in advance.

Wes Short · Answer

@Colleen F. Good idea in combining rooms, saw a property converted from a school to multis and that is what they did to expand the square footage per unit.

Have also heard of a lot of hotel or rentals being converted to condos. Being near a vacation locale those could possibly work. Turns into more of a flip instead of CF but an idea!

Colleen F. · Answer

@Daniel Kern You probably don't need to have to have much of a kitchen. MW, fridge, sink and cooktop. Also you could see if you can combine rooms to make a suite. Think about what you would not like about running a hotel and make sure a STR doesn't have those same disadvantages.

I grew up in Woodbridge and North Jersey (irvington and Towaco) as an adult. Still have alot of brothers and sisters in NJ. My sister rented in Belmar every summer, we spent more time in seaside park with kids. In RI I see these motel conversions but the ones closest to me were turned into section 8 housing I believe.

Daniel Kern · Answer

What part of NJ are you from?

Daniel Kern · Answer

@Colleen F.yes it’s nj near ocean city. Septic will be expensive and I took that into account. The size of the rooms, bc it’s a motel, may not offer the size needed for a kitchenette so I’m struggling. I love the location but don’t wanna run a motel.

Colleen F. · Answer

@Daniel Kern is this NJ ? I grew up there so I am familiar with the shore. That will be an expensive septic and my understanding from family in state is you almost always need to replace on title transfer. I don't see it attracting families unless you add a kitchenette. You just don't want to go out for every meal. Look at your commercial zoning it may include STR.

Daniel Kern · Answer

@Colleen F. thank you for the feedback. It is currently operating as a nightly motel with the current owners living on property in a duplex unit included in the sale. These are your traditional motel units without a kitchen. Just queen sized beds, a bathroom, microwave and mini fridge. The location and proximity to the beach is the draw for me. It’s just outside a family resort town so there would be a cost savings to families traveling here. I have a full time job already and am not interested in running a motel but the STR is intriguing me. Maybe rehab and add some kitchenettes and look to set minimum nights as suggested. Great call on the septic! Even without me including in the post you’re spot on that it would need replacement or rehab based on conversation with current owner.

Colleen F. · Answer

@Daniel Kern does it operate nightly now? I think you could just set a minimum stay requirement which is common in STR and have keycode doors.. That said normally you need some type of kitchen to do this because people may not stay for a week without cooking facilities. Also STR are a hospitality business so you are going to need more availability then a LTR. You could have one room dedicated to an onsite manager. You need to see if there is enough draw for a conversion. I will say that there are areas here where cottages can't be year round. I am not however familiar with the zoning restriction that dictates that. Also it could be on septic so check that out.

Seasonal Motel Conversion?

7 Replies