Hotel Conversions: What You Need To Know By Sara Berrada

By Sara Berrada

When you are looking at purchasing an existing hotel with the idea that you are going to convert it into another property type, there are many things to consider. Does this existing hotel lend itself to a particular kind of building? Does the hotel have drawbacks that might prevent a certain kind of establishment from working? Each of these questions need to be answered in order to determine if your hotel conversion will be successful.

Convert it into what?

The first thing to do is to decide what you want to do with the building. You might be considering opening an apartment building or perhaps you want to have a senior living centre. You may even want to convert the rooms into offices and start and office suit building. It largely depends on the type of building that you are thinking of buying. The building type must be conducive to these sorts of ideas, otherwise it is unlikely that you will realistically be able to achieve that desired property change.

Senior living complex

Starting a senior living complex is a perfectly good idea because each of the hotel rooms already has a bathroom, bed, fixtures, etc. The hotel is also likely to have a common area, so that the residents can congregate during the day. However, if the hotel is multi-level and does not have an elevator, you are not going to be in a good position to house the elderly on the upper floors of the hotel. You either have to have elevator installed, or you need to rethink your idea.

Office building

When you want to start office suites, it doesn't really matter if the hotel has multiple levels or not. However, you are going to have to make some concessions when it comes to the bathrooms and the layout of the rooms. Each room will have to be stripped of its fittings, and things such as beds or bedroom furniture. If you are considering this type of conversion, it is likely that a substantial amount of modifications may have to be made. This is because an office building is vastly different to that off a hotel. Except for the actual building design and rooms, many things would need to be changed and this may require great expense.

Apartments

If you want to open up apartments, you will find that you are looking at a golden opportunity because hotels are living spaces. However, when a hotel room is converted to an apartment, you will need to have kitchenettes installed. The apartments will not be marketable without the installation of these amenities. Further, the rooms will have to have slightly increased security, as the purpose of the living suite is changed from temporary to permanent accommodation.

How to solve these issues?

Now, each of these problems can be solved with a little bit of creative renovation! However, you have to consider how you are going to pay for and complete the renovations, the time period that you have and the resources available. It will be necessary for you to speak with professionals and draw up a budget and plan.

Paying for renovations

Paying for renovations could be done through a construction loan. A business plan and building plans will be necessary. This means you'll need to hire an architect. When applying for an investment loan to purchase the building, you will need to meet the requirements of the lender that you apply with. Often investors borrow large amounts and use the equity in their existing investment properties to borrow.

Be realistic

You also have to consider whether your plans will actually work with the property you are looking at before you get in over your head. Proper planning will give you the best chance at success in your new hotel conversion venture.

Sara is an independent writer who works for the Home Loan Experts, mortgage brokers who specialise in obtaining finance for people investing in a hotel conversion or other property type.

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