Buying a hotel, motel or RV park in Florida

You'd be buying rooms or sites that need filling every night. Hotels and motels earn most of their money from rooms. Guests book directly, through online travel agencies that keep a commission, or through a brand's reservation system if it's a franchise. Some add a restaurant, bar, meeting space or gift shop. RV parks rent sites by the night, week, month or season, and many in Florida fill with winter visitors who come back year after year. Some also lease lots to mobile homes that stay put.

Two numbers drive revenue: occupancy (the share of rooms or sites rented) and the average rate. Costs include labor for the front desk, housekeeping and maintenance; utilities; franchise fees if branded; property taxes; and, especially in Florida, property and windstorm insurance. Most of these sell with the real estate, so you'd be buying land and buildings along with the business. A small motel or RV park is often run by a live-in manager or couple. A larger hotel has a general manager and department heads.

• Guests coming for more than one reason: vacations, business, sports and events, nearby hospitals or construction work.
• Plenty of direct bookings and repeat guests, not total reliance on online travel agencies.
• For RV parks, seasonal guests who rebook before they leave, and monthly sites that stay rented in summer.
• Roofs, air conditioning, plumbing and pools in good repair, with records of what was replaced and when.
• A good general or resident manager who plans to stay.
• Review scores that have held up over several years.
• For a branded hotel, a franchise agreement with years left and no large property improvement plan (the list of upgrades a brand requires) hanging over it.
• A site outside the worst flood zones, or buildings that came through recent storms well.

The Division of Hotels and Restaurants at the Department of Business and Professional Regulation (DBPR) licenses hotels and motels as public lodging establishments under chapter 509. The license can't be transferred (section 509.241). You apply for your own and must pass an opening inspection before operating (rule 61C-1.002). A restaurant on site needs its own license as a food service establishment, and alcohol licenses come from DBPR's Division of Alcoholic Beverages and Tobacco.

RV parks, mobile home parks and campgrounds hold a yearly Department of Health permit instead, under chapter 513. The permit doesn't transfer, and a new owner must apply within 60 days. An unpaid final fine can block the new permit unless the buyer assumes it (section 513.02). If mobile homes sit on rented lots and the park has 10 or more lots, the Florida Mobile Home Act (chapter 723) adds resident protections.

Stays of six months or less carry state sales tax and usually a county tourist development tax. Some counties collect it themselves, so you may register with both the Department of Revenue and the county. Pools need a Department of Health operating permit, and a new owner must apply within 30 days (section 514.031).

• Occupancy and rate by month for several years, checked against the sales and tourist tax returns actually filed.
• The buildings. A full property inspection covering roofs, air conditioning, fire alarms and sprinklers, pools and elevators (which need annual inspections under chapter 399), plus any open code or fire marshal violations.
• Insurance. Get your own quotes for wind, flood and liability before you sign. In Florida they can change the whole picture.
• The franchise. Whether the brand will approve you, what upgrades it will require, and what it charges.
• Booking sources. How much comes through online travel agencies, and what they keep.
• For an RV park. The list of long-term residents and their agreements, any duties under chapter 723, and the condition of water, sewer and electrical service to the sites. Many parks run their own utility systems, which have their own permits and repair costs.
• Staffing. How hard it is to keep housekeepers and maintenance staff in that town during peak season.

• How full are you, and what do you charge, in your best and slowest months?
• Where do your bookings come from: direct, online travel agencies, the brand's system or repeat guests?
• What major work has the property needed in the last five years, and what's coming next?
• How did the property come through the last few hurricanes, and what did insurance cover?
• Who runs things day to day, and will they stay?
• For an RV park: how many guests return every season, and how many sites are rented by the year?
• If it's branded, has the brand said what upgrades it would require from a new owner?