Motel Mingle Forums Motel Leasehold What Is the Price to extend a Leasehold?

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  • #1793

    CVM

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      Does anyone have any recent experience in extending their Leasehold? What is the value of further years?

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      • #8129

        howie

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          https://www.resortbrokers.com.au/learn/blog/breakthrough-on-motel-valuations.html
          this is a formula that resort brokers has come up with , worth a look

        • #3213

          Mountain Man

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            We extended ours for 10 years from 16 years remaining, worked out around $3k per year. We paid costs.
            A landlord who has a good tenant would be crazy to knock it back or try to charge too much because it is money for jam, unless the lease is nearing its end.

          • #3209

            wmbondwmbond

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              Bit of a “How long is a piece of string” question this one. In my travels as a motel broker I come across all sorts of answers. Some owners just give the extra years if they have a really good tenant – who maybe be good at keeping up ongoing renovations etc (Tenant may just pay legal costs for the lease extension) – Others may tack it onto the rent rather than having to come up with a stack of cash..

              5% of Adjusted Net or $5k P/A would be a ballpark for an “Average” lease. But I have seen owners asking $10k for that same average lease… (Average Lease showing a return of around $100k PA Net Profit)

              Wayne@rnrmotelsales.com.au

            • #3192

              Motel MingleMotel Mingle

              Keymaster
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                I feel this is an important question. Does anyone have any recent formula they know is currently used to value a leasehold extension?

                Finding answers.        Sharing ideas.        Solving problems.

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