Accommodation & Motel Yield Guidelines

Location, surrounding industry and perceived risks are all factors affecting profit predictions for your accommodation business.


The following overview provides a guide with regards typical motel yields in today’s marketplace:

Freehold Going Concern

Yields for Freehold Going Concern motels currently range from 11% to 17% depending on the motel’s location, performance and risks associated with it.

Generally, motels in coastal or CBD/fringe CBD locations will reflect higher (firmer) yields and those in areas dependent on fluctuating economies such as mining and gas will reflect lower (softer) yields. The majority of motels in steady, reliable economic areas produce a yield of between 13% and 16%.

Freehold Investment

Yields for Freehold Investment motels currently range from 8.50% to 11% depending on the lease terms, motel’s location, condition of the improvements and performance. Generally, motels in more sought after coastal or CBD/fringe CBD locations will reflect higher (firmer) yields provided the lease term remaining provides secure tenure. 

Leasehold Going Concern

Yields for Leasehold Going Concern motels currently range from 24% to 32% depending on the lease term remaining, the motel’s location and performance. Generally, motels in coastal or CBD/fringe CBD locations will reflect higher (firmer) yields and those in areas dependent on fluctuating economies such as mining and gas will reflect softer (lower) yields.

The majority of motels in steady, reliable economic areas are between 25% and 28%. A leasehold interest is a diminishing asset and hence lower (softer) yields are reflected as the remaining lease term diminishes.

The yields for Leasehold Going Concern motels are softer than Freehold Going Concern motels as it is a business purchase only with no security over the bricks and mortar.

When it comes to securing competitive finance for your accommodation business, more than ever before, experience counts. Ask us about recent accommodation lending case studies that may provide insights into your own business opportunities.

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