New hostel budgeting

I just posted my introduction, but thought I'd follow it up with a more proper question.

As mentioned in the first thread, some partners and me bought a building about 20 months ago, redid it and have just hosted the first batch of students for a period of 12 weeks. We have 50% occupancy 'guaranteed' for the near future due to one of the partner's main business, but of course are looking to bolster that in the other 6 months.

Looking back, I certainly would not have gone down the path we did. We jumped on the idea way too quickly with 0 knowledge and I believe we ended up overspending on the purchase and fixing up of the property, because we bought a building that needed to be redone from the ground up. It's ended up more than double our original (unrealistic) budget. That in turn has led to several rounds of putting on more money on top etc. etc. I *think* it would have been easier and cheaper buying one of the small hotels we've since seen for sale around the city :) Anyway, there's no mortgage on the building (that's apparently nearly impossible in BA), so we've had to put up all the cash between us. We've now taken to some more serious budgeting for the long term.

All this history to lead to some questions ;)

* does anyone have any experience in terms of owning a building and what kind of margin we should be looking at? The tricky thing here is that we don't necessarily have to pay rent on the building, but of course we're all expecting some kind of return on the capital for the building as well. What I find particularly difficult is choosing what a decent yearly rate of return is on the cash invested in the building itself. Is break even enough and do we just expect to sell the building for more?
* Assuming we want a 5 or 6% return on the capital (just throwing this out as a number), what do hostels in general try and have left over as an operating profit? I realize there's going to be insane differences here, but anyone have any insight into this that they'd be willing to share?

I think we can squeeze a 4% return on the cash invested in the building on 50% occupancy, but clearly that leaves the running of the hostel as a rather non profit affair (not to mention that putting the money in the bank would have been a 'better' investment in terms of yearly return). Of course, 50% still leaves some room for increasing that occupancy :)

Anyway, your thoughts and insights are most welcome!