Buy a Narooma motel for under $2m, get hands-on and 'double the income'
A Narooma motel with significant potential for a DIY buyer has hit the market for under $2 million. The selling agent says the underperforming asset is ripe for a strategic refresh and could easily double its returns.
The Farnboro Motel at 206 Princes Highway, on the NSW South Coast, 350 kilometres south of Sydney, is the first accommodation travellers see when entering the seaside town from the south. The single-level complex comprises 13 ground-floor units, a manager’s residence, pool and barbecue area, and sits close to beaches, shops, and Narooma Inlet.
But unlike neighbouring motels, it has barely scratched the surface of its earning capacity.
Selling agent John Murray of Whale Coast Realty says the property’s biggest attraction is how much income is being left on the table – and how quickly that could change under new ownership.
“It’s got an enormous upswing,” he says. “It’s only running at around 25 per cent occupancy.”
According to Murray, the average occupancy rate for a motel in Narooma is approximately 60 per cent. If the Farnboro Motel were to achieve this average rate, it would increase its annual income by 1.5 times or even double it.
Much of the reduced occupancy stems from personal circumstances rather than market conditions, although increasing room rates would also help. “What they do is they just block out days – they just turn off Booking.com on their property Monday, Tuesday, Wednesday at the moment,” Murray says.
The long-term owners, who have held the property for 17 years, now clean and manage the entire motel themselves. Despite being active only part-time, the motel still generates gross sales of about $205,000 per year – a base figure investors see as ripe for improvement.
“I’ve got people trying to buy it; I’ve had five offers,” Murray says. “Someone’s got to come in and make the figures work.”
The motel has undergone gradual upgrades, including the refurbishment of its pool and ongoing improvements to its rooms. “They’ve just slowly but surely gone through each room and slowly updated them all,” Murray says. “They’re probably three-quarters of the way through updating the rooms in the sense of flooring and bathrooms.”
However, the property still leaves room for a buyer who is willing to put in the effort and reap the rewards.
“They’re definitely two-and-a-half to three stars. They’re not trying to be anything they’re not,” Murray says, noting that easy ground-floor access to all rooms appeals to many guests.
Narooma’s accommodation market has tightened in recent years as tourism continues to grow. Murray points to a recent investment nearby. “Justin just spent $20 million on the Whale [Inn] Motel, so that’ll be top of the line,” he says. “There’s got to be – down the line – space for others.”
Pricing remains crucial, with five offers received so far and one earlier contract falling over at the final stage. “It’s just getting the price right,” Murray says, adding that the vendors are motivated. “This is an opportunity to buy now and settle before Christmas.”
With solid bones, a manageable size, and clear upside, the Farnboro Motel offers investors – particularly hands-on operators or renovators – the chance to turn an underperforming asset into a high-yield coastal business. “I’m selling a lot of potential,” adds Murray.
The property offers a peaceful atmosphere, close to amenities, just a two-minute drive from Narooma Plaza and four minutes from Narooma Surf Beach. The area is also home to attractions such as Australia Rock, Lady Darling Shipwreck, and Bar Rock Lookout, which draw tourists to the region.
Hospitality mogul Justin Hemmes acquired a second venue in Narooma in 2021, when his Merivale group purchased the Whale Inn motel and restaurant for an undisclosed amount. This follows the purchase of The Quarterdeck, a “tiki bar”, in the South Coast town earlier that year.
