Educating your clients on the differences between flagged and unflagged properties can make a difference in their investment decision. Outline the benefits of each and assist them in making a smart choice - one that meets their financial goals. Your clients will appreciate it.

Whether you are new to commercial real estate or a seasoned veteran, understanding the benefits of flagged versus unflagged hotel/motel properties will help you educate your clients. Assisting them in understanding the difference when they're searching for this type of investment helps equip them with the details they need to make wise decisions.

Flagged properties are typically those that fly the "flag" of a franchise such as Hilton, Marriott or Holiday Inn. The benefits to these types of hotels/motels include:

• Name recognition - many business travelers use the same franchise when they travel (taking advantage of hotel points or mileage rewards that they collect with each visit).
• Uniform standard of appearance and guidelines - followed from one property to another, this ranges from room size to retail pricing.
• Nationwide reservation system is in place - prospective guests call one convenient number and are directed to the hotel/motel in the area where they'll be traveling.

A hotel franchise may be costlier than an unflagged property because your client isn't only purchasing the real estate; they're accessing an established name, group buying power and national advertising associated with the franchise.

On the other hand, unflagged properties are not affiliated with a nationwide brand. While their names may not be as recognizable, they maintain a competitive advantage. However, that advantage is on a different level than flagged hotels.

Still a large component of the hospitality industry, unflagged hotels/motels benefit from sources of revenue that may include:

• Food and beverage - bars and restaurants conveniently on site.
• Conference and/or banquet rooms- catering to large groups, conventions, and/or parties.
• Daily and weekly room rentals.
• Monthly room rentals.

Monthly room rentals are a concept typically not provided (and sometimes not allowed) in flagged hotels. Owners of unflagged properties usually make the decision to offer these semi-permanent rentals based on their target market and the needs in the local community.

When it comes to the hotel/motel industry, discuss the differences between flagged and unflagged properties with your clients. Determine their needs up-front so not only can you guide them accordingly, but you demonstrate your knowledge and expertise in the commercial marketplace.