Anaheim is a city in Orange County in the state of California. The 2010 U.S. Census reported a 336,265 population, which means it is Orange County’s most populous city, and the 10th most populous in the state. It is also Orange County’s second largest city after Irvine in terms of land area, and it is famous for its convention center, sports teams, and theme parks. Founded in 1857 by 50 German families, it was incorporated in 1876. Since then, the city has evolved and grown as it depended on various industries, as well as tourism. In 1955, the Disneyland Resort opened, catapulting the city to worldwide fame.
Anaheim Hotel & Motel Property for Sale & Lease – Should You Buy or Lease?
There are pros and cons to both leasing and buying hotels and motels. As an investment, whether you purchase or lease the property, and whether you look into an entire hotel or motel or a single room only, the advantages include:
- A low requirement for capital investment (if you purchase a single room), while ensuring a high return, particularly if you invest in a hotel room in Orange County, where demand is very high.
- The option of having a fixed rate of return, which is available for both buyers and lessees, without having to take on any of the risks of hotel management. This means that if there are customer complaints or breakages, the responsibility lies with the hotel manager.
- Having a steady return available to you, particularly in Orange County, with high average daily rates.
- Being able to use the hotel or room for your own personal use as well, although this means that you will not earn an income at that time.
Essentially, hotel & motel properties offer investors a profitable, low risk method of having a diverse investment portfolio.
However, downsides exist with investing in hotel & motel property as well, including:
- Collecting returns can be incredibly complex in terms of jurisdiction and taxes.
- Not having any influence on the marketing policy of the hotel, or of its management strategy, unless you purchase the entire operation.
- Requiring you to have a good knowledge about the hotel industry in order to ensure that you are playing the market right.
- The fact that there is some seasonality involved in hotels, which means you won’t always have a good or predictable month per month income.
- The fact that competition to make a single room purchase is incredibly strong, including with foreign investors vying for any room that becomes available.
To help choose between the two options, being aware of the trends and statistics in terms of prices, supply, and demand, can be very beneficial.
Anaheim Hotel & Motel Property for Sale – Trends and Statistics
In January 2013, Anaheim ranked first in the country’s 25 largest hotel industry markets. Various pieces of research showed that the area of Anaheim and Santa Ana were first in the country in terms of their occupancy rates, as well as in their RevPAR (which means Revenue per Available Room) statistics. Furthermore, Anaheim hotels ranked third in their average daily rate.
- The occupancy rate rose to 74.4%, which was a 16.4% increase year on year.
- The average daily rate was $129.64, representing an increase of 15.6% year on year.
- The RevPAR was $96.87, which was a 34.5% increase year on year.
Interestingly, while demand for rooms continues not just to be high, but to rise as well, there has not been an increase in availability in Anaheim. Rather, there have been some 20,000 different hotel rooms across all the resorts in the area, and this has remained unchanged for a long period of time. Some suggest, therefore, that those looking to invest in new hotels and motels could be making a very good investment.
Anaheim Hotel & Motel Property for Lease – Trends and Statistics
There are currently no hotel & motel properties for lease in Anaheim. These buildings tend to be owned through mortgage or outright purchase. However, as the statistics above have demonstrated, deciding to invest in hotel & motel properties is a very solid financial decision with high yields and low risks. The hospitality industry as a whole in Anaheim is incredibly strong and certainly one to build on.
Anaheim is, of course, a very popular tourist destination, as well as having large convention centers that are attractive for businesses. Because demand regularly surpasses supply, there has been a significant increase in people owning holiday villas to meet the demands of tourist visitors in particular. These properties, like hotels & motels, are generally only available for purchase and not for lease. This means that, while interesting for investors in terms of returns, they are often overlooked because they also require direct daily property management.