Featured throughout pop culture, and being only a short drive from Los Angeles, the city of Newport Beach is a hot spot for tourists and nearby residents. This makes it an especially ideal place to open a hotel or motel. While Newport Beach isn’t the first place most travelers plan to stop by, it acts as the perfect small town buffer for those seeking the Southern California experience without the Los Angeles price tags and rush hour traffic.
Newport Beach had a population of more than 87,000 and climbing by 2013, and has one of the highest average household incomes out of many Orange County communities at more than $200,000 per year. Of course, this does mean that property prices tend to be higher than that of cities with lower average incomes, but it also means that there are more families with disposable income who may be looking to spend on hospitality and accommodations.
Newport Beach hotel and motel properties which see the most success are those near the waterfront. If you can’t afford a location close to the surf, find one which at least offers views of the bay from the higher levels.
Newport Beach Hotel & Motel Property for Sale & Lease
Commercial real estate in Newport Beach is priced by the square foot, and primarily starts at the $1 million mark. This might seem unrealistic for some, but there are many options for financing a business of this type. Silent partners, commercial real estate loans, and private investors can help you get your foot in the door. It’s a risky venture, but one that has plenty of potential to pay off big.
If you’re sure that buying a property isn’t in your future, it doesn’t mean you need to abandon your dream of running a hotel. For buyers who choose hotels and motels only as a means of investing, there are benefits to leasing the property. The thought of finding an individual or a business who can manage the property effectively and bring in an income is an appealing one to those without the passion to maintain the property themselves.
Newport Beach Hotel & Motel Property for Sale
Before you buy a hotel in Newport Beach, you need to do your homework. This is a city that enjoys the finer things in life, which means that in order to be successful, you should start with a canvas which has already been primed. In other words, don’t count on flipping a fixer upper, unless the fixing will be done quickly.
Understand the ins and outs of the hotel business structure, before committing to a sale. Many new owners purchase this kind of property in the hope of creating an income, only to realize that there is much more to running a motel or hotel than they previously thought.
Many Newport Beach hotels for sale are already staffed and ready to roll. Sometimes an owner decides that he or she no longer needs property, or that it’s best to sell while the return is high. When this happens, businesses which are already developed and running are put on the market, picked up, rebranded, and continued. If this is your first time buying a property of this type, it might be in your best interest to choose a location that already has a head start and is doing well. Buying a hotel that has a good reputation will go far with future marketing efforts.
Newport Beach Hotel & Motel Property for Lease
Leasing a hotel property is a long-term investment. The length of your term could range anywhere from five to ten years depending on the owner, and how lucrative the hospitality industry is. Newport Beach is a great location to become acquainted with the hotel industry, because most of the locations in this area are so well kept.
It should be pointed out that large properties of this type pose risks to lessees. Even though there’s no potential for failing on an entire hotel investment, there are still pitfalls to avoid, and ways that you could lose money if you aren’t careful. When looking to lease, it’s a good idea to choose locations where most of the hard work is already done for you. Don’t choose a location that requires too much elbow grease, because even in a well-maintained property there are chores and repairs to take care of, and you don’t want to get too overwhelmed early on.
Leases in Newport Beach are based on a price per square foot per year. This will be affected by the proximity to the beach, additional utilities and amenities such as pools and spas, as well as the age and condition of the building. Leasing doesn’t mean that you need to take on all the work alone. Rely on your staff, bring in additional help for the first few months, and don’t be afraid to get your hands dirty.