Wednesday, August 19, 2015
Other than getting the revenue up as high as possible, there is something to consider before preparing your inn for sale that will greatly affect value.
While maintaining the physical condition of any property (whether commercial or residential) is always important, when it comes to selling a business, the tax return is king. And let's face it, we all prefer to write off as much as we can (legally) to avoid paying income tax! And that's fine, until it comes time for you to sell your lodging property.
It's a classic case of having cake and wanting to eat it too!
Lenders and appraisers look at the prior 3 years' tax returns. They look at both the gross revenue and the net operating income. As important as the gross revenue is, the management of your expenses is almost more important. The value is based on the net income. It's pretty simple: higher net income = higher business value = higher market value/selling price.
So what can you do to make sure that your property could go to market and command the highest price? By showing the highest profit you can for the 3 years prior to going on the market. Or at least 2, with the possibility of providing a current year-to-date P&L that a prospective buyer can review. But lenders will need 3 years of tax returns when they determine what they'll lend a buyer.
Yes, you might have the value in the asset (being the real estate, the land and the FF&E - furniture, fixtures and equipment), but if the buyer's intent is continued use as a lodging property, the value of the business is what the bank will lend against, not the value of the real estate. Having a higher asset value than the business value is still a good thing, but the net operating income from the business still needs to support a buyer's debt service and provide enough remaining cash flow to meet a lender's minimum requirement.
So think about this a couple years sooner than you're thinking of going to the marketplace. Hopefully during your run as an innkeeper you've been able to realize tax benefits available and can let the tables turn to benefit you in the end in terms of value when it's time to sell.
This way, you can have your cake and eat it too!
Saturday, August 15, 2015
Buzzfeed shows us some things to do when in Maine. None of this is really new to me, but I've lived in Maine over 11 years now! And some of my listings are near them. Check it out...
#1 - Acadia National Park. If you haven't been, put it on your bucket list. Amazing. And I have a new listing coming on board nearby.......stay tuned......!
#2 - The "Godmother" sandwich in Raymond - this is a ten minute drive from my listing Romah Motor Inn!
#3 - Coastal Maine Botanical Gardens - one of the best in the country. And my listing Harbor House Inn in Boothbay Harbor is just down the road! Wiscasset Motor Lodge is just 25 minutes!
#4 - Little Bigs Donuts is just 11 miles from my listing Atlantic Birches Inn in Old Orchard Beach!
#5 - Fryeburg Fair is only 35 minutes from Romah Motor Inn and 45 minutes from Briar Lea Inn!
#7 - Atlantic Birches Inn is just 17 miles from a really good lobster roll with a view in Cape Elizabeth at Fort Williams State Park!
#8 - Watch a sunset over Sebago Lake, or at the nearby Long Lake and Brandy Pond, just a mile from Romah Motor Inn!
#9 - HA! Take a class at Stonewall Kitchen Cooking School....where I happen to be a guest chef instructor :)
#11 - The Brussels sprouts at Blue Rooster in Portland is just 15 miles from Atlantic Birches Inn!
#14 - The adorable cookies at 3 Dogs Cafe in Rockport is just 3 miles from my listing Claddagh Motel and from Timbercliffe Cottage in Camden! A few miles further up is Youngtown Inn.
#15 & #16 - Romah Motor Inn is just 15 minutes to the Magic Lantern or Drive-In movie theaters!
#20 - Stay at Greenville Inn or Wilson Pond Camps and go whitewater rafting with Northeast Whitewater! Or just take one of the kayaks or canoes offered to guests right from Wilson Pond Camp's launch on Lower Wilson Pond instead!
#21 - Frosty's Donuts ARE among the most delicious raised and glazed donuts around! And they have a location in Bath, just a mile up the road from my listing The Inn at Bath!
#24 - L.L. Bean. What can I say? Stop at this flagship store on your way up or down scenic Coastal Route 1!
#28 - Meet a moose at Baxter State Park - this is a gorgeous place to visit. But you'll be able to see Moose around Greenville and Moosehead Lake when you stay Greenville Inn or Wilson Pond Camps!
#32 - Common Ground Fair is really worth a trip from anywhere! But it's about a 45 minute drive from my listings Timbercliffe Cottage, Youngtown Inn, Claddagh Motel
#33 - Schutty's Seafood is just a few minutes from Inn at Bath!
#34 - Just a 30 minute drive from Romah Motor Inn gets you a lovely view from the top of Burnt Meadow Mountain Trail!
#35 - Paddle through the Scarborough Marsh in a canoe just a few miles from Atlantic Birches Inn!
#36 - Enjoy some really great homemade food at Home Kitchen Cafe in Rockland, just a few miles to Claddagh Motel, Timbercliffe Cottage and Youngtown Inn! Although save room for dinner at Youngtown Inn (eat lunch at Home Kitchen Cafe!)...
#37 - Worth a drive or stop en route up and down the coast is Portland's Allagash Brewing Company but an easy visit from Atlantic Birches Inn!
Monday, August 3, 2015
Talk about atmosphere, ambience, alluring appeal...guests love a well crafted outdoor living space as much as an indoor space. In the ideal weather, these outdoor features can be a serious draw to your inn and your occupancy! Just make sure you consider safety first!
Sunday, August 2, 2015
New price, now offered at $599,000.
New owners just need to work on the business, NOT the property, this is a very turnkey, charming 9 room motel! A newly updated website and TripAdvisor booking link should be good for business, but there are no direct online reservations (some sellers are old school and if it works for them, that's okay!). With online reservations and the business that the Naples area gets, there is plenty of room to increase this business. And there's a snowmobile trail across the street for easy access for wintertime guests! Just about a mile to the causeway. Something this size with 9 rooms is ideal for the traditional bed and breakfast buyer who can't afford a 9 room bed and breakfast (which often cost much more). New owners could offer beautifully prepared breakfast baskets with baked goods and fresh fruit, delivered to each unit's door in the morning and could do the same in the afternoon, with freshly baked cookies! The grounds are large enough to enhance for common gathering areas for guests (like a bed and breakfast) should they choose to mingle. Or the cookies could be offered outside at the common area along with lemonade, etc. There's a lot of potential at some of these wonderful small motels. Just food for thought!
Contact me for details or visit the listing page on my website!
Contact me for details or visit the listing page on my website!