Before you buy a motel, know which of its three prices you are paying.

A motel in Australia is priced on its tenure and its profit, not its room count. A leasehold sells on a return on the lessee’s profit after rent: 25 to 27% on average in January 2026, with 2025 state medians of 35.6% in Queensland, 32.3% in New South Wales and 29.2% in Victoria, so a leasehold earning $300,000 after rent is priced at roughly $850,000 to $1.2 million depending on the state. A freehold going concern sells at 9 to 10% for quality assets and 12 to 15% regionally, so the same motel with the land is a $2.3 to $3.5 million purchase on a $350,000 profit. A passive freehold sells at 7 to 8% on the rent. Those are the ranges a specialist accommodation broker reported; they are conventions, not a valuation of any motel.

A leasehold motel in Australia is the business and the right to occupy under a lease: you pay the landlord rent, commonly around 45% of the profit before rent, and you own the goodwill, the chattels and the lease for as long as it runs. A freehold going concern is the land, the buildings and the business together, with no rent and no landlord, at roughly three times the price for the same motel. The leasehold is the cheaper way in and the higher return on paper; the freehold is the stronger security and the one a lender funds most readily. A passive freehold is the third form: you own the land and buildings and someone else runs the motel under the lease.

Rent under an Australian motel lease is set one of two ways. The industry benchmark splits the motel’s profit before rent about 45% to the landlord and 55% to the lessee. The alternative sets rent at 20 to 25% of accommodation and sundries turnover plus no more than 8% of food and beverage turnover. Either way, rent is then reviewed annually to CPI or a fixed percentage and to market when an option is exercised, and in Victoria the retail leases legislation prohibits ratchet clauses that stop rent falling at a market review. Leases commonly run ten years with two or three five-year options. Read the review clauses before the financials, because the rent formula is the price you are paying for the next twenty years.

To buy a motel in Australia, a bank that lends to the business will fund a freehold going concern to about 70% of the price where a going-concern valuation supports the income, on debt-service cover of at least 1.25 times, with first-time operators accepted at a lower gearing. A leasehold is funded on the lease and the cash flow; 70% has been done case by case, and specialist guides put the typical bank advance at around half of the lease value, repaid inside the remaining term, with fifteen years principal and interest common. A non-bank on our panel considers motels only for experienced operators, at about 55%. The cover test usually bites before the LVR ceiling: $200,000 of rebuilt profit supports roughly $1.24 million of debt at about 10% over fifteen years, whatever the ceiling says. Lender positions in writing, 16 September 2026; subject to lender criteria, security position and eligibility.

Yes, for a motel in Australia the valuation comes first. A lender’s appetite for a motel rests on a going-concern valuation that tests the room count, the average rate, the occupancy and the lease, and it cannot give formal appetite until it has one, which makes the sequence a little chicken-and-egg. The practical route is to order the valuation yourself, for mortgage purposes, from a national valuation firm with an accommodation desk, and have it assigned to the lender once you are approved; negotiate with a finance clause so the timetable is yours. An indicative term sheet can come earlier on your statement of position, your experience, two years of personal returns, the capital you are putting in and a business plan, but the approval will rely on the valuation.

A first-time motel operator in Australia can be funded, at a lower LVR than a proven operator, and one non-bank will not look at the file at all. What moves a lender is a managing background in accommodation or hospitality, a business plan the valuer’s income figure can support, capital of your own going in, and a handover from the vendor measured in months. Experienced operators are where a lender stretches its limits; first-time buyers should expect to bring more equity and to be assessed on the group, not the motel alone.

Motel occupancy in Australia sat at about 70% in 2024-25 and national accommodation occupancy at 74.3%, on IBISWorld’s June 2026 figures, while a specialist accommodation broker reported regional occupancy at a record 65.6% and capital cities approaching 80% in June 2026. Occupancy is seasonal and predictable: peaks at Christmas and New Year, school holidays and summer, troughs in February and March, May and June, and November. Ask for three years by month, by channel, from the property management system. The average is not the number; the shape is.

The motel industry in Australia has recovered rather than grown: revenue of $4.1 billion in 2025-26 after five years of 11.1% annual growth off a pandemic base, a profit margin back at 11.0%, and a forecast of 2.5% a year to $4.6 billion by 2030-31, with IBISWorld expecting no meaningful demand recovery before late 2027 while rates and inflation stay high. What is not growing is supply: 2,339 rooms were added in 2025, motels attract almost no development capital, and the count of motels is forecast to fall from 2,498 to 2,397 by 2031-32. Existing motels, especially on regional highway corridors and near business and event demand, are the ones the research expects to hold pricing power.

For a motel purchase in Australia, send five things: the property management system export by month, rate and channel for three years; three years of financials and tax returns with the add-backs itemised; the lease with its reviews and options, or the title and planning certificate for a freehold; the maintenance and refurbishment history with what is still outstanding; and the registrations and licences with their transfer terms. For yourself: a statement of position, two years of personal tax returns, the capital contribution and its source, a resume of your accommodation experience, and a business plan for the first two years. That is the pack the valuer and the lender both read, and it is what our 24-hour answer is built on.

Buying a motel in Australia can attract transfer duty on the land in a freehold purchase in every state, and some states still charge duty on the business assets and goodwill as well, Queensland and Western Australia among them, while New South Wales, Victoria and South Australia have abolished duty on goodwill. GST does not apply where the sale qualifies as the supply of a going concern: the vendor supplies everything needed to keep the motel running, carries it on until settlement, and both parties are registered and agree in writing. Get the duty and GST position from your solicitor and accountant before you sign, because a going-concern clause that fails costs 10% of the price.

A lease top-up on an Australian motel is the premium a lessee pays the landlord to extend an unexpired lease, restoring the term that a buyer and a lender want to see. The benchmark method values the goodwill first (the adjusted net profit capitalised at the leasehold rate, less the chattels) and then charges about 45% of that goodwill value, spread over the extension years as a share of the original term. On a lease with fifteen years to run, a ten-year top-up is often the difference between a motel a bank will fund over fifteen years and one it will not. Agree it with the landlord before contract, and put the cost in the price.

For Queensland motels, IBISWorld cites CBRE’s estimate that about 81,000 rooms will be needed across South-East Queensland during the Games against 67,200 in inventory, with the development pipeline adding only 11%, and Queensland construction costs up 44% over five years, which keeps new supply out. Highway motels on the corridors into Brisbane, the Gold Coast and the Sunshine Coast are expected to absorb construction workforce and event overflow demand from 2026 onwards. Queensland also carries the highest leasehold yields of the three big states, 35.6% at the 2025 median, so the question for a buyer is whether the price already assumes the Games.