I'm interetsed in opening a hostel in Canada. I've been digging into the financial side of things and have a question relating to leasing space. I can't purchase a building as I don't have the funds, which means a commercial lease would be my only option. Renting commercial space can be quite expensive and as I was doing some research, I learned that most industries would not accept an annual lease to annual sales ratio of more than 15% (some industries as little as 5%). Can anyone share their experience with leasing costs/ratios? From what I can tell anything below 20-25% would be very difficult to achieve with a 30-40 bed hostel. Maybe the ratio is quite different for hostels?
Thanks for the insight!