The valuation of hotels and motels is a highly specialized form of real estate appraisal, requiring not only a thorough understanding of the many principles and procedures of general appraising, but also an in-depth knowledge of hotel operations. Valuation of hotels and motels consists of three components: real property, personal property, and business value. All these unusual characteristics should be considered during the valuation process in order to derive a supportable estimate of market value.
Besides the real property like the building and land, hostelries require a significant investment in personal property such as furniture, fixtures, and equipment that have a relatively short-used life with much higher depreciation rate. Food and beverage services also add overhead to the operation and require additional business and managerial talents. Unlike retail, apartment, or office building where rents are secured in multi-year leases, a hotel experiences a complete turnover in every two to four days. A good will or bad reputation spreads rapidly and can have an immediate effect on the occupancy. Another facet of the business value is the benefits that accrue from association with a recognized franchise or management affiliation.
Removing the business value from the income stream can reduce property tax significantly. Identifying and quantifying the business value of a lodging facility is an act.
AdSatis Management delivers independent valuation and property tax solutions. Our 30 years of experience combined with in-depth domain knowledge on property tax valuation, assessment, methodology, and analytics, provides exclusive property tax consulting services to minimize property taxes for all types of commercial properties in North America.
It’s your right to appeal the assessed value and the most effective way to ensure not over paying property taxes is to protest. AdSatis Management can help saving you time, effort, and money, year after year.
Call us at 1-855-388-8282 or 403-483-9888 for a free, no-obligation valuation analysis of your property.
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