The COVID-19 pandemic has resulted in a vast blow on the hospitality sector. With the shift in travel and tourism, various hotel owners have started selling their estates. The worldwide pandemic has resulted in an economic blow on the hospitality sector in general and hotels in particular. Real estate investors and agents understand the expenses of new construction. Hence, they recognize the significance of acquiring and converting hotel rooms into affordable, multi-family units. Hotel conversion is the best strategy for investors and hotel owners.
The financial distress of struggling hoteliers is resulting in hotel evacuation. Hence, to meet the increasing demand of the housing market, various hotel owners have come forward to transform their vacant hotel rooms into residential units. But who will require these units? It is the workforce population that acts as a service provider of society. They are on the verge of eviction. Hence, they need more residential units near their job location.
Why is hotel conversion the best option?
As mentioned earlier, undertaking new construction is a costly affair. Hotel conversion is not that hard and is a cheap alternative to new construction. Irrespective of the condition of the hotel, if your property is not immediately operating, you may transform the same into a housing unit. Not all properties are equally suitable for the conversion process. Hence, real estate investors and developers dive into brokerage and evaluate the property to understand its features and suitability for conversion. Remember that hotel conversion is far more convenient than new real estate construction.
Consider these property features before conversion
Before taking the final decision on hotel conversion, there are a few areas to bring under deliberation. You must understand the potentiality of your property to be converted into a housing unit. For this, you must pay attention to the following given points:
- Location: When thinking of real estate, location plays a significant role. Real estate agents and investors pay considerable attention to this aspect more than any other facet. Keeping that in mind, Maxwell Dreversays, a hotel situated in bustling downtown may convert better than one on the far fringes of the city.
- Site suitability: Hotel units are very different from residential units. Mostly, they come with a single bathroom and bedroom. Hotels are for a luxury stay. Hence, converting these luxurious suits into residential units is a time-consuming and tedious task. Remember that residential units are 2 to 3 bedroom apartments. Thus, hotel owners must work on the structure with the help of professionals. Site suitability is significant to ensure that the converted property is saleable.
- Zoning: Every state has zoning and legal constraints. It makes the hotel conversion a complicated affair. Investors must research the restrictions in detail before purchasing a property. Moreover, paying attention to the building codes is another vital area. You cannot take the legal aspect lightly to ensure better conversion and profitability.
- On-site amenity:Investors often shy away from hotels with full-service laundry and kitchen rooms. These facilities are not essential for an apartment. On the contrary, Maxwell Drever reflects, some investors convert the space into an innovative feature that includes a gym, movie theatre, ballroom, and playing ground.
Hotel owners must understand one thing, and that is the financial consideration. Hotel conversion is a time-consuming and challenging task. Hence, you must pay attention to the renovation cost and property tax to ensure better revenues and financing.
