Converting multi-family STR/LTR to commercial motel/hotel - Pros and Cons

[Jake Faris]

Hi all - I have a 3-unit multi-family property (3 bed 3 bath, 3 bed 3 bath, and studio) with an unfinished basement and an attached 2-car garage that I plan to remodel soon. The unfinished basement is 900 sf and the garage is 721 sf, so this could all add a lot of value. So far, I've rented one of the units (3 bed and 3 bath) as an STR and the two remaining units as LTR.

The property is zoned as mixed-use tourist commercial, which allows me to convert the property into a motel/hotel. This would also mean that I could convert all the units into STRs. Does anyone have any experience with converting a multi-family property into a motel/hotel? What are the pros and cons to making this transition (e.g., tax implications, insurance, etc.)? If I'm missing any existing threads that covered, please share!