Due diligence before buying your first hotel (part 2)

January 15, 2025

In our first post of this series, we discussed different aspects of hotel due diligence, including the physical condition of the property, the importance of reviewing paperwork and documentation, and the need to assess the surrounding area.

In this post, we’ll dive deeper into the technical aspects of a physical inspection—crucial for identifying hidden issues that might not be immediately visible. Whether you’re handling the inspection yourself or bringing in a professional, understanding the tools and methods used can make a significant difference in the outcome. 

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The Importance of a Physical Inspection

When buying a hotel, it’s easy to get caught up in the business aspects—pricing, occupancy rates, etc. However, the condition of the property is just as important. Issues like moisture damage, structural weaknesses, or electrical faults may not be immediately visible but can turn into significant and costly problems down the line.

This is why technical inspections are crucial. They go beyond a basic walkthrough, using advanced tools and techniques to uncover problems that could impact the safety, functionality, and longevity of the building. Identifying these risks early can save you significant time and money in repairs. 

It’s especially important when buying a hotel, as issues like dampness in a bathroom, which may seem insignificant in a private residence, can lead to negative reviews in a hotel setting. These small problems can quickly escalate, impacting guest satisfaction and potentially harming your hotel’s reputation and bottom line.

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Key Technologies Used in Building Inspections

To thoroughly assess a hotel’s infrastructure, professionals use a range of technologies. Here are the most important ones:

  • Infrared thermography: Thermal imaging is a non-invasive technology that detects temperature variations across surfaces. This method is highly effective in identifying hidden issues such as water infiltration, insulation deficiencies, and electrical hot spots. For example, poor insulation in the ceiling can be detected through thermal imaging by identifying areas where heat is escaping or cold air is entering. This is especially useful in older buildings, where insulation may have degraded over time.
  • Surface moisture detection: Moisture damage can cause significant structural and aesthetic issues over time, and its presence is often difficult to detect without specialized tools. Inspectors use moisture meters and sensors to measure the moisture content in building materials such as concrete, wood, and drywall. Identifying areas with elevated moisture levels helps prevent problems like mold, which can not only damage the property but also pose health risks to occupants. 

Buythathotel.com allows you to conduct initial due diligence and pinpoint potential issues to address during the physical inspection. For instance, in regions with heavy rainfall, like northern Portugal, buildings may be more prone to water infiltration. Identifying moisture early is key, as hidden water in walls, ceilings, or floors can cause significant damage and expensive repairs.

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Hotels for sale and average precipitation in northern Portugal
  • Crack measurement and structural deformation: While cracks in walls or foundations may seem like minor issues, they can be indicative of deeper structural problems that could compromise the safety and stability of the building. Inspectors use advanced tools like laser levels and crack rulers to measure the width and depth of these cracks with precision. These tools allow them to monitor crack progression over time, which is crucial in identifying whether the cracks are a result of normal settling or if they signal foundation issues, shifting soil, or structural failures. 
  • Pipe leak detection: Using sonic leak detectors, inspectors can locate leaks hidden within pipes behind walls, under floors, or in hard-to-reach areas. These detectors work by picking up the sound waves produced by escaping water, allowing the inspector to precisely locate the leak. Left unchecked, these leaks can lead to water seepage, mold growth, structural damage, and higher water bills.
  • Glass thickness measurement: The energy efficiency of a building can be greatly influenced by the type and thickness of its windows and facades. Inspectors use specialized tools to measure the thickness of glass in windows and facades, assessing whether it meets current energy-efficiency standards. If the building has outdated or insufficient glazing, recommendations may include upgrading to double or triple-glazed windows, which provide better insulation, reduce energy costs, and improve the overall comfort of the building’s occupants. 
  • Verification of electrical network: Inspectors will check the building’s grounding system to ensure that all electrical components are properly connected and secure, reducing the risk of electrical shocks or fires. They will also verify that the supply voltage is correct and within acceptable limits, as improper voltage can damage appliances and lead to safety hazards. 

At Buythathotel.com, we use AI to analyze public reviews of the hotel across platforms like Booking, Airbnb, and Google Maps. This allows you to identify common guest complaints, from minor issues like poor Wi-Fi (easy to fix) to more serious concerns like noise concerns (which could be costly for the new owner). These insights can highlight potential challenges to address during the due diligence process.

AI analysis of guest feedback for a property in Costa Rica highlights addressable issues like cleanliness and Wi-Fi, along with noise, which may require insulation upgrades

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What Should a Professional Inspection Include?

When you request a technical inspection, ensure that the proposal includes the following:

  • A comprehensive list of techniques to be used (thermal imaging, moisture detection, crack measurement, etc.)
  • An assessment of all major systems, including electrical, plumbing, and HVAC.
  • A detailed report with measurements, photographs, and descriptions of any issues found.
  • Recommendations for repairs or improvements, with estimated costs when possible.

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Conclusion

Tools like thermal imaging, moisture detection, and crack measurement are essential for uncovering potential problems in a hotel before they turn into expensive complications. By investing in a thorough inspection, you’ll be better equipped to make informed decisions and avoid costly surprises after purchase. Moreover, issues like mold can harm your hotel’s reputation—something that could quickly affect your ratings and bookings if not addressed properly.

With Buythathotel.com, you can easily compare properties from a curated selection of small hotel listings across multiple real estate platforms. Our interactive map (currently available in Portugal) enables you to perform initial due diligence by evaluating over 20 data layers, including environmental risks, points of interest, competitive landscape, and more—all within minutes.

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