Anyone converted a shophouse into a hotel/guesthouse?

[steelepulse]

I've got a 4 storey shophouse that has had tenants renting it out for a restaurant and staff quarters. Their business is now finished and I want to perhaps turn this into a hotel/guesthouse/hostel and turn it into a turnkey business for someone to rent. Has anyone done anything like this and if so, what trouble/unexpected problems did you have?

The area is a real popular island for hostels, so that mght be the best niche to build.

Unfortunately I haven't seen the building in 7 years, so can't remember all details, just that is has 4 stories and an open deck overlooking the ocean. I see buying new beds, installing some A/C's perhaps adding a few bathrooms as the extent of what would need to be done to set up a hostel.

Any advice, suggestions, or comments are welcome as I think this would be the best use of the building to maximize returns.

[PattayaPhom]

Shophouses here tend to be designed very badly with a severe loss of usable space on each floor, mezzanine or balcony areas are useless yet take up so much space. You may need to redesign each floor area to make use of the space, its not expensive or hard to do. 4 floors, make sure you have a good water pump. Cheap bedroom furniture packages are available including matresses. Which Island???

[steelepulse]

Thanks PP. Yes I'm aware of many of the design flaws, but nothing that some hammers and new bricks placed can't solve. Looks like the cheap solution is to put in multiple bunk beds into each room, while a more costly option would be to partition off big rooms and convert into smaller "private" rooms for two or three travelers. This in on Lanta, which would be busier if they ever put the bridge in that's been talked about for a few years now.

[robertson468]

My advice is first do a business appreciation of the building and put it on paper, which must include what you intend to do. It should also include alterations to the building, fixture and fitting requirements, furnishings and soft furnishings. Then get around Home Pro, and all the other suppliers and do a financial appreciation. I did this from my business appreciation because I knew what I needed to buy, but I had a column for every supplier so had a fairly accurate indication of costs. Having done that I developed a cash flow plan, which told me what I need to spend and when and made sure I had the funds available to settle with builders, painters, carpenters etc. If the ground floor has been the restaurant, you might like to get a professional engineer to caste his weathered eye over the weight bearing capability of the ceiling. Quite often, people whack out walls willy nilly, without thought of the hundreds of tons sitting on top, or why the walls are there as supports. This is quite easily rectified with RJs in the appropriate place. Good luck and hope it all works out for you.

[Khun Jean]

First calculate how many years it will take to recoup your investment.

Then make the decision if it is worth it. In my book it should be around 4-5 years maximum.

Also the rental rate should be interesting for other parties. They need to make a profit too.

A hostel would be the easiest as you can get away with having shared showers and toilets.

A guesthouse/hotel would need that for every room.

Also inform yourself which licenses you need.

It depends on the number of rooms. Not sure, but it think it is 10 rooms or more and you need a hotel license.

[Vorranuch]

If more than 4 rooms/20 guests you need a license, and you are unlikely to get one as the building will be inspected and will not meet safety requirements. Also, the value of a hotel is in its brand and customers, not real estate. You will not get a huge rent compared to what you had previously from someone having to start the business from scratch and taking all the risks.

[steelepulse]

Thanks for the input robertson and Khun Jean..

>>you are unlikely to get one as the building will be inspected and will not meet safety requirements

Why would you say that Vorranuch? You know the building and have inspected it? This building is no different than thousands of guesthouses/hotels/hostels operating around the country.

[trogers]

Thanks for the input robertson and Khun Jean..

>>you are unlikely to get one as the building will be inspected and will not meet safety requirements

Why would you say that Vorranuch? You know the building and have inspected it? This building is no different than thousands of guesthouses/hotels/hostels operating around the country.

And plans are underway to add another. I call such a guesthouse/hostel a crematorium, much because

there is no proper fire alarm and escape in such a structure. And we all know how strict the fire regulations and enforcements are in this country.

[steelepulse]

Thanks for the input robertson and Khun Jean..

>>you are unlikely to get one as the building will be inspected and will not meet safety requirements

Why would you say that Vorranuch? You know the building and have inspected it? This building is no different than thousands of guesthouses/hotels/hostels operating around the country.

And plans are underway to add another. I call such a guesthouse/hostel a crematorium, much because

there is no proper fire alarm and escape in such a structure. And we all know how strict the fire regulations and enforcements are in this country.

Appreciate the helpful and informative post, keep those pearls of wisdom coming!

[brain1]

I have been following Asia Backpackers (http://www.asia-backpackers.com/?flipbook=true check the existing Hoteliers brochure) in Thailand and they have an offer to property owners which may be right for you you can, I am led to believe they are doing something simular in Bangkok and Phuket, with property owners who simply want to rent a property and do not want to take the franchise option

[yankee99]

My advice is first do a business appreciation of the building and put it on paper, which must include what you intend to do. It should also include alterations to the building, fixture and fitting requirements, furnishings and soft furnishings. Then get around Home Pro, and all the other suppliers and do a financial appreciation. I did this from my business appreciation because I knew what I needed to buy, but I had a column for every supplier so had a fairly accurate indication of costs. Having done that I developed a cash flow plan, which told me what I need to spend and when and made sure I had the funds available to settle with builders, painters, carpenters etc. If the ground floor has been the restaurant, you might like to get a professional engineer to caste his weathered eye over the weight bearing capability of the ceiling. Quite often, people whack out walls willy nilly, without thought of the hundreds of tons sitting on top, or why the walls are there as supports. This is quite easily rectified with RJs in the appropriate place. Good luck and hope it all works out for you.

Never noticed any load bearing walls in shop house construction. At least not in pattaya.

[trogers]

My advice is first do a business appreciation of the building and put it on paper, which must include what you intend to do. It should also include alterations to the building, fixture and fitting requirements, furnishings and soft furnishings. Then get around Home Pro, and all the other suppliers and do a financial appreciation. I did this from my business appreciation because I knew what I needed to buy, but I had a column for every supplier so had a fairly accurate indication of costs. Having done that I developed a cash flow plan, which told me what I need to spend and when and made sure I had the funds available to settle with builders, painters, carpenters etc. If the ground floor has been the restaurant, you might like to get a professional engineer to caste his weathered eye over the weight bearing capability of the ceiling. Quite often, people whack out walls willy nilly, without thought of the hundreds of tons sitting on top, or why the walls are there as supports. This is quite easily rectified with RJs in the appropriate place. Good luck and hope it all works out for you.

Never noticed any load bearing walls in shop house construction. At least not in pattaya.

No, locals can hardly build vertical walls. Thus, there will unlikely be any load bearing walls. Observe local contractors at work if you want to understand local construction. Shophouses are structures of columns and beams.

[SurinBeach]

Hi SteelPulse.....

I converted a couple of shophouses (at Surin Beach),

knocked out the staircase in the middle of the block and installed a new one along the side wall....

European Kitchens, SunParadise windows etc

Pics at http://www.phuketwest.com/view_property.php?id=1403

Pop up North if you fancy a look ...

(How's your squash then?).

[jongkolkhoo]

I am converting a 4 storey shoplot into a small hotel. I started being smart and came up with a few design then got a contractor to do the job. I ended with so much mistake that I had to engage an architect to solve my mess . ended up breaking up a part of my previously build brick walls and rooms . Paid a million for my mistake.

My shop lot is 5 m x 14 m x (8 shops ) - 5 shops in a row and 3 shops in a different soi.

However, a single lot is not as tough. Which island? Daily income or monthly income?

Water heater ? Key card system ? The list of enquiry is long . You can email me and I am willing to share my experience.

[PattayaPhom]

Chonburi is over 14 rooms need extra licence, cost 400k. Dont think you will be having that many. Good luck with whatever venture you decide on

[simon43]

If more than 4 rooms/20 guests you need a license, and you are unlikely to get one as the building will be inspected

Phuket is more than 12 rooms. If 12 or less, take my word that you will never be inspected by anybody for anything

Simon

[steelepulse]

Thanks everyone. Surin Beach, if I ever make it up your way I'll be ready for a hit.

Edited October 20, 2013 by steelepulse