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Do you own or lease your hostel location?

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allthis4adream started this discussion 15 years 3 weeks ago

Do you own or lease your hostel location? Why? What are your terms? Special structure etc.?

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irish_guy

13 years

No, haven't started anything... done quite a bit of research though, and was negotiating a place in Colombia. They were first renting the property out, and then they decided to sell. I didn't have enough capital to buy, and the banks in Ireland are pretty much not doing business...

I went to them with a lease to own offer, which I could have afforded, and which I would still be interested in doing. If you're not familiar with this... then here's the basic premis.

You give them some key money, say around 5% of the property value, which they keep, whatever happens. You then agree a lease term, say 10 years. You pay a fair monthly rent, and also a premium, which is set aside, and is deducted from the sale price, which is pre agreed. You can probably work in a buy option after 5 years, or continue the first agreement and see out the 10 years. If after the 10 years is up, and you don't want to buy the property, the owner keeps the key money and the premium.

They didn't want to go for this option... and I don't have 100k handy, so, no dice.

The above figures are all general, and you would of course have to work out a deal that works for both parties... I have other business ideas in mind, but, if the right opportunity came along, in the right place, I'd definitly look into it.

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escapefrompeckham

13 years

[QUOTE=irish_guy]was negotiating a place in Colombia... I don't have 100k handy, so, no dice.

Hey irish_guy

Not sure what currency you are talking but it is my understanding that the minimum for an investor visa for Colombia is US$100k - is there some loophole available or are you taking another route?

Apologies for slightly hijacking the thread and the personal nature of this question... but if you don't ask you don't get

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jauntster

13 years

Hi Folks
I realise this thread has been inactive for a while now but didn't want to start another Lease or Purchase discussion.

I'm in the "lease camp" myself but unsure how to go about getting things started.
Is it best to go for residential properties that have hostel potential and then hope that a "change of use" (UK term that probably applies elsewhere) is possible as well as hoping that the owner would be willing to see their much loved property be used for a hostel.
OR
go for commercial buildings (not necessarily accomodation type already) and tackle a "change of use" if necessary.

I've noticed that as soon as you mention business leasing to an estate agent they run a mile as they don't offer that service but don't want to loose the property on their books that is perfect for a hostel.

Any advice or help would be much appreciated.

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jonL

13 years

Hi Folks
I realise this thread has been inactive for a while now but didn't want to start another Lease or Purchase discussion.

I'm in the "lease camp" myself but unsure how to go about getting things started.
Is it best to go for residential properties that have hostel potential and then hope that a "change of use" (UK term that probably applies elsewhere) is possible as well as hoping that the owner would be willing to see their much loved property be used for a hostel.
OR
go for commercial buildings (not necessarily accomodation type already) and tackle a "change of use" if necessary.

I've noticed that as soon as you mention business leasing to an estate agent they run a mile as they don't offer that service but don't want to loose the property on their books that is perfect for a hostel.

Any advice or help would be much appreciated.

A belated response to your question.

Using my knowledge in Australia here.

Depends whether to change of use from residential or commerical to a hostel depends on:
a) Building codes to change from each of these type of classification
Look at the building codes, it may mean a lot more alterations to convert commercial to hostel than residential to hostel or vice versa. Speak to your local council/borough's planning department for advice

b) How comfortable are the Councils/Boroughs in agreeing to your modification/change of use
c) How comfortable are the landowners in agreeing to your modification/change of use

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Hurl Hostels

12 years

Do you own or lease your hostel location? Why? What are your terms? Special structure etc.?

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TBD

7 years

My partner and I are looking to open a hostel in the US - we are in the midst of a hectic business plan writing season, and we are winging the whole thing.

We do have business mentors through SBDC and SBA's Score program, but because we are looking to open in a new market, you guys are the only support we have :)

I found a pretty expensive building that would be perfect for our business, and it would allow for expansion, but I would NEED to convince the owner to set up a rent to own deal with us.

I know, i'm crazy - ive seen peoples faces, but here is the scope:

$500k bulding

$14000 yearly taxes

$130k Down

$7333 per month for 5 years (includes taxes and R2O rent price)

........

Thoughts??? Am I absurd for even thinking to prepose such an idea to a building owner? He would either like to sell or lease the space and is an entrepreneur himself. Can you think of a better payment plan or any ideas that will help me sweet talk him into the idea?

Thanks in advance for your support!

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Drunk Traveler

7 years

I want to give this a bump and add a on to it.

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cmloechl

7 years

Drunk Traveler, if you see this, it looks like perhaps your post a few months back was cut off before you could add anything. Do you have details or insight to share?

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