Lake Forest Hotel & Motel Property for Sale

Lake Forest is a particularly beautiful part of California’s Orange County. According to the 2010 U.S. Census, it had a population of 77,264. The city was quite late to incorporate, which took place on December 20, 1991, when it became known as Lake Forest instead of El Toro. It now also includes the two master planned developments of Portola Hills and Foothill Ranch. This increased the number of homes in the city, and also the number of commercial cities. Interestingly, Lake Forest is one of this country’s safest cities.

Lake Forest gets its name from the two man-made lakes, which also serve as community gathering places. Both lakes are maintained by community associations. The forest it gets is name from is also man-made, being a eucalyptus grove that was built to increase development at the start of the 20th century.

Lake Forest, just like the county as a whole, is a very affluent part of the country, as well as one that is very popular with tourists. This is in part due to Disneyland Resorts being found in the county, and also due to its miles of beaches and surfing opportunities, and its pleasant coastal climate. As a result, there are always opportunities to enjoy nature, as well as the many hotels, bars, and clubs that are offered throughout the entire county.

Lake Forest Hotel & Motel Property for Sale & Lease

– Should You Buy or Lease?

If you are interested in hotel & motel space, be that as an investment or to run a business out of, you have two broad options available to you: buying or leasing. 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, there are disadvantages in investing in hotel & motel property as well, including:

  • Collecting returns can be incredibly complex in terms of jurisdiction and taxes.
  • Not having an 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 foundation of knowledge in the hotel industry in order to ensure that you are playing the market right.
  • That there is some seasonality involved in hotels, which means you won’t always have a good or predictable month per month income.
  • Competition to make a single room purchase in particular being incredibly high, including with foreign investors vying for any room that becomes available.

Lake Forest Hotel & Motel Property for Sale – Trends and Statistics

Lake Forest is home to a large number of established hotels and motels. Due to its beautiful natural area, with various walkways, natural parks, and forests, it is a very popular area with tourists, and eco-tourists in particular. However, there are currently no hotels for sale in the area. It is believed that this is due to the fact that there have been very few new developments since 2015, and those that have been developed are established, and all rooms have been purchased.

Lake Forest Hotel & Motel Property for Lease – Trends and Statistics

Similarly, there are currently no hotel and motel properties for lease in Lake Forest. Again, this is due to the market being fully established, and operating at good capacity.

As you can see, the investment market for hotel and motel properties in Lake Forest, CA is not very positive at the present time. That said, with a significant boost in the economy of Orange County as a whole, there is a chance that new developments will take place. As an investor, keeping your eye on movements within the commercial real estate market as a whole should always be a top priority. What the lack of available properties also means, is that investing in hotel and motel properties in Lake Forest is likely to be very successful. As such, if a property does become available, be that for lease or for purchase, you should not hesitate to go for it.