Independent motels
Motel buyers for independent and family-run properties
If you own a motel with no national flag and you have been the one answering the bell at midnight, this page explains how a sale of that property works and what we will ask you.
What counts as an independent motel
By independent we mean a lodging property with no franchise agreement: the name on the sign is yours. These are typically one or two storeys with exterior corridors and parking at the door, and many have an apartment or house on site where the owner or a manager lives.
Some were branded once and left the system. Some belong to a referral or membership group rather than a franchise. If a brand's sign is still up and a franchise agreement is in force, the page on selling a hotel that carries a flag is the better starting point.
How an owner-operated motel is priced
A motel is valued on income like any other lodging property, but the income of an owner-run business needs translating before a buyer can use it.
Putting a cost on your own labor
If you and your family cover the desk, the laundry and the repairs without drawing wages, the profit and loss statement overstates what a new owner would keep. A buyer adds back a manager's pay and desk coverage at market cost. That adjustment is not a criticism of how you run the place. It is the difference between buying a business and buying a job.
Room revenue as a quick yardstick
Small motels are often discussed as a multiple of annual room revenue, alongside the usual net-income approach. Both are explained, with the formulas, in our guide to how motels and hotels are valued.
The owner's residence and extra land
Living quarters, a vacant parcel next door, a closed restaurant space or billboard income all count, and they are easier to credit when they are documented separately.
Records, tax returns and cash income
Independent motels rarely have institutional bookkeeping, and we do not expect it. What matters is that the numbers can be supported.
What is useful to have
- Monthly room revenue for the last twelve months and the two or three years before
- Federal tax returns for the business
- Lodging or occupancy tax filings, which show the room revenue reported to the taxing authority
- Bank statements
- Reports from the property management system, or the registration cards if you still use them
- Statements from online travel agencies showing bookings and commissions
When the books and the bank disagree
A buyer can only pay for income that can be verified. If part of the revenue never reached the books, we cannot price it, and you should speak with a CPA about your records before any sale. We say this at the start so that it is not a surprise in due diligence.
What transfers when a motel is sold
A motel sale usually covers the land and buildings, the furniture, fixtures and equipment, supplies on hand, the business name, the phone number, the website and online listings, and the reservations already on the books. Licenses and permits are handled according to local rules, and some must be applied for anew by the buyer.
Staff and long-term guests
Tell us early about employees who live on site and about guests who have stayed for months. Long-stay occupancy changes how a property is underwritten, as covered under weekly-rate and extended-stay motels.
If the motel has closed
A motel that has stopped operating is a different kind of purchase, priced on the real estate more than on income. See motels and hotels that are closed or in distress.
From first call to closing on a motel
The sequence is the same for a motel as for a larger hotel: a first call, an NDA, a review of the numbers, a letter of intent, a purchase agreement, due diligence and a closing through title or escrow. Each stage of the sale is described on its own page. How long it takes depends on diligence, financing and any lender approvals.
In a small community a motel sale is news. If you would rather your staff and competitors hear about it after closing than before, read how we approach keeping the sale off the market. Many independent sellers are also at the end of a long career, and the page for motel owners who are retiring speaks to that directly.
Questions from motel owners
Do you buy small motels?
We do not set a minimum room count. A small motel with income that can be documented is worth a conversation.
My motel has no brand and no STR report. Is that a problem?
No. Most independent motels have neither. Tax returns, lodging tax filings and bank statements do the same job.
Should I list my motel with a broker instead?
It can be the better route if you want the widest exposure and are comfortable with a public listing. We weigh the options in listing a motel versus selling it directly.
Start with a confidential conversation
Tell us where the property is, how many keys it has and whether it carries a brand. We read every submission ourselves and call you back at the number you give.
Nothing you send is passed to a listing service, and sending it does not commit you to anything.
Tell us about the property
Read by the buyers. Never listed, never advertised.