One of the most significant hurdles that affordable housing developers face is estimating a broken hotel correctly. In particular, more cities are turning to hotel conversions for potential residential uses to help alleviate the cost of building new projects. Evaluating a hotel for conversion can be challenging, as many loose ends need to be considered before buying any property. Maxwell Drever argues that an evaluation process should begin with assessing current and future infrastructure needs, which can be met by putting some effort into your research. A few points explained by Maxwell Drever need to be considered firsthand before investing money in a hotel for conversion.
What About The Current Infrastructure?
Although you have a good idea about what happens when you take hotel properties, Maxwell Drever advises you to check out the infrastructure yourself. Then, you can check out the expenses and remodeling you need to make in that hotel to get the best results out there. To get up-to-date information on the current infrastructure of a particular area, consult specialists who specialize in research on sites such as infrastructure management and financing.
Check Out The Neighborhood
What happens to a neighborhood or community surrounding a particular hotel after its purchase? This is yet another important question that needs to be answered during the evaluation process. To be on the safer side, you should check out the neighborhood, walk around and meet with locals and see what they think of your particular purchase. As suggested by Maxwell Drever, residents can give you the best idea about the living condition of the area.
Is There Good Transit Accessibility?
Evaluating proximity to public transit can be tricky. However, it is one of the most critical factors that need to be considered during evaluation because, without transit accessibility, commercial activity might never return to an area again. This can harm property values and affordability for tenants if built in an area not accessible by public transportation.
Does The Hotel Have A Good Reputation?
Evaluating a hotel for conversion should always be done with current or future tenants. This is because if you stick to first impressions, your potential tenants will trust you more, which can profoundly impact their future behavior. If they don’t trust you already, they won’t stick to your project, and this will lead to bad outcomes down the line. Evaluating a hotel for conversion should always start with assessing what’s happening in that area. There are vital areas that need to be considered here and here.
What’s The Traffic Situation?
This is a no-brainer. Traffic has a huge impact on commercial activity and your overall property valuation. To get an accurate evaluation of the traffic situation, consider researching actual numbers of people in an area, which can be done through simple Google maps research or any other similar service.
Like any other investment, opportunity cost is also very important when evaluating a hotel for conversion into affordable workforce housing. Maxwell suggests that is the best thing to do here is to consider the net output you can get out of your investment.