The Key Hotel in Lancaster, PA has 20 rooms and an average daily room rate of $99. Your investment group has agreed to purchase it for $100,000 per room. It is 70% occupied and the plan is for this to continue, and collection and bad debt expenses are 5%.
-What is annual revenue collected gross and net after collection costs?
The costs of turning each room, for housekeeping, laundry and cleaning is $25 per night. The distribution cost for paying a reservation system, front office, back of the house for maintenance and repair is $30 per night.
-What is annual income before fixed, or revenue less the payment of turn and distribution costs?
Real estate annual triple net expenses for property taxes are 1% of the property price. Insurance is 0.5% of the property price.
-What are the real estate triple net expenses?