More about income.

Cannot stress enough this point. If you make a bad choice, you are going to spend your days (and nights) worrying instead of enjoying your guests. You might have to look for other sources of income outside. So again, the main question to be asked is - can this property support itself and me.

You will end up looking at a lot of numbers, do it! and if you do not feel like you know enough, hire a professional. Do not hesitate to ask questions, and than some more. Remember, once you bought it it is yours for better or worth and hospitality properties are not easy to sell.

There is no easy way to asses value but we found that going with this simple first check can rule very quickly most of the properties that will not work for us.

So...

Gross income x 4 = asking price.

Or

Net income x 10 = asking price.

These numbers should work, any asking price higher than that you should be leery of.

Any asking price lower than that look deeper to get more information, after all no one would sell a property for less than its worth.

Check expenses as a percentage of the gross income (remember, if it exceeds 50-60% ask for more info)

If all theses figures seem OK it is time to proceed.