Buying guest houses that are for sale is not the same as purchasing a house. You are buying real estate and an accommodation business all in one so there are many more factors to take into consideration.
You should not make the decision to buy a place on your own in this case, it is much wiser to get a second opinion especially from somebody who has business experience and/or knows the property market inside out. As always, perhaps more so in this case, location is important.
There are many guest houses for sale in South Africa and in fact throughout the world and as you will be going to buy a place to run as an accommodation business there are lots of factors to consider.
Location
Have a good look around the area in which you are considering buying, are there shops close by? If the property is within a coastal destination, is it within easy access of the local beaches?
If you are not familiar with the area within which you intend on buying find out about all the local tourist attractions and things to do in the area.
It is no good buying an accommodation business in a location where their is very little to see and do! May seem obvious but you would be surprised at the kind of properties that people buy.
Are you ok with having lots of children running around the place? If so then look for property in an area that has lots of things for kids to do and places that they can play.
Facilities
You may even want to buy somewhere with a huge garden attached and have a play area built especially for children to keep themselves entertained.
There are many other factors to consider within the building as well, such as the kitchen facilities, restaurant or dining area, bedrooms and does the place already employ staff and if so, will they be willing to work for you as the new owner?
We have just touched on this topic which can become extremely in-depth and really the best advice we can offer for people who are thinking of or looking at buying guest houses for sale is to not make the decision without the help of experts.
Buying guest houses for sale and selling at a profit
There are several ways to find the right property that you can sell for a profit.
Go for a repossessed guest house
There are many cases where an individual starts up a guest house and then cannot maintain it. When this happens, the individual will be unable to pay the debt that they will undoubtedly owe to a financial service provider.
The financial service provider will then repossess the property and sell it at a very low price in order to get rid of it as quickly as possible.
You can find a guest house at a very low price if you contact your financial service provider, or any other financial service provider and find out what repossessed properties they have for sale.
Find an individual who needs to liquidate their assets
If an individual owns and runs a guest house but is having trouble making ends meet, they may be looking to sell their guest house at a low price to make some money to pay back their debts or to regroup.
You can find these sort of properties if you look at online classifieds. Usually, the sort of individual who is looking to sell their guest house at a very low price to gain some cash will advertise privately.
Online or print classifieds may have advertisements of this kind.
Look for a guest house that is somewhat run down, that is not making a good profit or that could do with several improvements.
This sort of property can be found by looking very carefully. Contact a real estate agent, look at online at classifieds websites like Gumtree and keep your eyes open when you are driving around your area.
A property like this will enable you to make some simple adjustments and improvements to increase the value of the business.
Improve the property to increase its value
There are a myriad of things that you could do to improve the value of the guest house that you have purchased. It will, however, take some time to get this right as it is not a quick fix. You will also have to have some capital to spend on improvements and adjustments.
The following tips may help improve the value of the guest house:
- Make sure that the basic structure of the property is working and well-maintained
This means ensuring that the structure, the electrics, the plumbing, the roofing and everything else shows no flaws and works well.
Make sure that there are no wood lice or anything else destroying the property.
- Improve the experience that your guests would have
Make sure that the rooms, bathrooms, dining area and anywhere else look good, are comfortable and well decorated.
- Review the staff
Make sure that the staff who work at the guest house are well-trained, right for their positions and doing a good job.
- Look at the menu and service options
Make sure that you are offering the best kind of food possible and the right services to your guests.
- Make sure there is secure parking
Secure parking will attract more guests.
How to sell the property to get the most profit
After you have made improvements to the property, take some time to build a reputation and bring in profit. The profit that you bring in may help to cover the costs of buying the property in the first place and of the improvements that you have made.
Once the guest house is doing well, but still has room for growth, put it on the market. Advertise carefully and make sure to sell when the market is good.