Why Lease

A motel lease is seen as an excellent option for operators to get into the motel industry for a number of reasons, some of which include high returns, saleability, low capital outlay and secure tenure.

A large number of motel buyers are now looking at motels for sale on a lease basis, not as a stepping stone to get into a freehold, but as an opportunity to make high profits and returns, over a shorter period of time.

As a motel broker we are seeing the market for motel leases expanding with demand growing, from first time motel operators looking to get into the industry, to experienced operators who have owned and operated both freehold motels and leasehold motels in the past.

Motel sales continue to rise as more and more people discover the benefits that a motel lease can offer. Leases were historically thought of as, not as secure as freeholds, which is correct from a bricks and mortar point of view, however motel leases today are seen by many as having just as good tenure as freehold. Even some of the major banks treat a long term lease as being as good as freehold tenure, and then finance motel leases accordingly.

More Lease Facts

The standard motel lease includes the purchase of the business, chattels and goodwill. Chattels include all furniture, i.e. beds, tables and chairs etc., soft furnishings, eg., carpet, bedding, light fittings, office and kitchen equipment, and decor items, and all appliances. Ducted air-conditioners (driven by a central motor) usually form part of the building and so are owned by the landlord. Box or split-system air conditioners, which can be removed without major structural alterations, are therefore generally considered part of the chattels. Hot water systems are usually the lessee's obligation to maintain or replace at their cost.

The business is yours to market, manage and build for maximum profit and growth. The more business you generate, the more you make. Your landlord receives an agreed annual rental, representing a commercial return on his or her investment.

You are responsible for the day to day repairs and maintenance of the land and buildings, including painting, up-keep of hot water systems and centrally ducted air conditioning/heating system, and signs.

The lessee is also required, under the terms of the lease, to pay council rates, land tax (excluding Queensland) and full insurance on the building and business.

Your lease states that the landlord must keep the structure of the buildings in good order throughout. The landlord is responsible for structural repairs only.