Wow! It's not pretty out there! We just got back from our travels to the southern part of the state. We previewed several inns/resorts that we have advertised on our website, and concluded that prices are coming down (sometimes WAY down!) on hospitality properties. Take a look at these:
http://www.innmatchmakers.com/prp/190.html (reduced over $400,000)
http://www.innmatchmakers.com/prp/153.html (reduced over $400,000)
http://www.innmatchmakers.com/prp/142.html (reduced $300,000)
http://www.innmatchmakers.com/prp/159.html (reduced $370,000)
http://www.innmatchmakers.com/prp/113.html (reduced $500,000)
http://www.innmatchmakers.com/prp/137.html (reduced over $300,000)
http://www.innmatchmakers.com/property.asp?strUnit=192 (reduced $500,000)
The lesson to be learned from this has to do with pricing. The initial listing price for a hospitality property should never be a number pulled out of the air. We always ask our new listing clients to have an appraisal done on their property. This step can save a ton of headaches down the road, and it certainly helps buyers understand how the price came to be.
Sadly, sometimes the news isn't good for sellers and was the case of a property we were asked to list this week. The owners found out that property values in their area have dropped precipitously, and their bed and breakfast is worth HALF of what they thought. They elected NOT to list at this time, and to wait for a better market. This of course, is always an option for owners who haven't entered the "burnout" stage yet. Saddened though we are, we've also saved ourselves, the owner, and any prospective buyers from future headaches.
http://www.innmatchmakers.com/prp/190.html (reduced over $400,000)
http://www.innmatchmakers.com/prp/153.html (reduced over $400,000)
http://www.innmatchmakers.com/prp/142.html (reduced $300,000)
http://www.innmatchmakers.com/prp/159.html (reduced $370,000)
http://www.innmatchmakers.com/prp/113.html (reduced $500,000)
http://www.innmatchmakers.com/prp/137.html (reduced over $300,000)
http://www.innmatchmakers.com/property.asp?strUnit=192 (reduced $500,000)
The lesson to be learned from this has to do with pricing. The initial listing price for a hospitality property should never be a number pulled out of the air. We always ask our new listing clients to have an appraisal done on their property. This step can save a ton of headaches down the road, and it certainly helps buyers understand how the price came to be.
Sadly, sometimes the news isn't good for sellers and was the case of a property we were asked to list this week. The owners found out that property values in their area have dropped precipitously, and their bed and breakfast is worth HALF of what they thought. They elected NOT to list at this time, and to wait for a better market. This of course, is always an option for owners who haven't entered the "burnout" stage yet. Saddened though we are, we've also saved ourselves, the owner, and any prospective buyers from future headaches.
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A recent appraisal we had done on our property came in at exactly what we paid for it--and this after negotiating the sale price to half what the listing was price was. We closed a year ago.
ReplyDeleteThis is not good news for inn sellers, but good news for inn buyers. In our case, it means that the money we are making running our inn in many months services the loan and pays our operating expenses. We've been open only a year on a property that was closed for almost a decade, and we're building our reputation. But we have done better than we anticipated.