How Do Buy to Let Hotel Rooms Compare to Traditional Property Investments?
For the last few years, high-end hotel developers have been offering the chance to buy hotel rooms in their developments on a buy to let basis.
Of course, the idea that you can buy hotel rooms sounds glamorous but how do buy to let hotel developments compare with traditional overseas property investments?
If you’re thinking about investing in property overseas then there are probably a few things on your wish list. A manageable investment level, a hands off project, an excellent return on investment and possibly a magical destination that you’ll want to visit year after year will all be important.
Of course, with the current economic climate, you’ll also want a secure and safe investment that is likely to ride out the property downturn.
It’s not that surprising then that one of the more recent features of the overseas property market – buy to let hotel rooms – is continuing to grow despite the doom and gloom elsewhere. Almost unheard of ten years ago, buying a hotel room is being seen as an ideal way for private investors to limit their personal exposure and still enjoy the income benefits and potential capital growth.
So how, exactly, can you buy hotel rooms?
Buying a hotel suite is not that different to traditional buy to let property investments. A hotel developer will sell a number of rooms, suites and apartments within the hotel to private investors. As business travelers and tourists book the rooms, the developer pays out a percentage of the room rates back to the investors.
Investors who buy hotel suites get a ‘hands off’ investment where an experienced hotel management team handle everything from marketing to maintenance. Financially, buy to let hotel developments can deliver both capital appreciation and regular income with returns in the region of 10%+ from income alone being regularly achieved. Of course, when you buy hotel rooms there’s always an added bonus to consider – free and discounted stays in a high-end hotel.
So how do they compare with other overseas property investments?
Buy to let hotel developments can help minimise risk.
The way in which hotel developments offset individual risk is one of the biggest attractions for investors keen to buy hotel rooms. Buying an overseas property to let out brings with it one big risk – not being able to let the apartment or villa you buy.
When you buy hotel rooms, the returns are not based on the particular suite you purchase but rather the success of the entire hotel. An occupancy rate of just 50 – 60% would normally be enough to deliver a solid return on a buy to let hotel room.
You can buy hotel rooms as part of a SIPP or other personal pension investment.
Usually when you buy hotel rooms, one of the perks is free or heavily discounted stays at the hotel. If you don’t need personal use of the hotel though, buy to let hotel rooms can be perfect for buying via self-invested personal pensions (SIPPs).
If you buy hotel rooms through a SIPP you will benefit from tax free capital growth and earnings. In fact, your SIPP can own an individual hotel room or even share in several through a syndicated arrangement.
Many people buy hotel rooms for a hassle free investment.
From fixing the broken toilet to choosing the curtains, traditional buy to let investment properties come with their own set of headaches. Investors usually get around this by paying for a management company to keep an eye on things and take bookings.
With buy to let hotel room investments, everything from marketing to maintenance is a part of the package from the start. Experienced hotel management companies ensure the highest quality standards in everything from customer care to the furnishings in the rooms.
Buy to let hotel rooms offer a solid return on your investment.
As the last 12 months have shown, investing in property can be a harrowing experience. Falling property prices have created the ultimate buyers market, but unfortunately, no one can be sure when, or even if, property price increases will return to their pre-crisis strength. An overseas property today could actually fall in value before things get better.
This is perhaps the biggest reason for the rise in popularity of buy to let hotel rooms. The option to buy a hotel room should be considered less of an investment in property and more of an investment in the tourism of the region – with the benefits of property appreciation thrown in for good measure. Even as overseas tourist numbers ebb, the growing number of people taking their holidays in their home country tends to pick up a lot of the slack. High-end hotels also benefit from the conventions, conferences, weddings and other events that they host throughout the year.
No investment is free from risk, but for people considering an overseas property investment, buying a hotel room could offer just the right balance between reduced risk and potential for growth.
Owner Invest has dozens of opportunities to in some of the most upmarket developments in Eurpoe, Asia and the Dubai.
For more information about how and why to buy hotel rooms visit >>
What is the difference between a traditional room and a deluxe room in the sheraton hotel?
I’m going to book a hotel room but I have no clue what the difference between those 2 rooms please help me!!!
I’m going to book a hotel room but I have no clue what the difference between those 2 rooms please help me!!!
Please recommend me about hotel room at the sheraton and give me tips.
Thank you ^.^
How to Compare Discount Hotel Rooms Rates Online
Finding discount hotel rooms is not at all a tough matter because of the advancement in IT industry. People around the globe can book the hotels anywhere sitting at the comfort of their home. There are lots of top travel websites which suggests about the hotels of the particular city. However, numerous hotel websites are also there from where you can check out the exact location of the hotel and its facilities including rates and status of the hotel. If you fix a destination for holiday then the city name should be accompanied while you search for discount hotel rooms in the major search engines.
It is also advisable to see the top websites of discount hotels to compare rates online. The rates may vary but it is very important to go through the feed backs of the customers to know the more clearly about the hotels. So, if you feel any doubt while booking a motel then it is always preferable to hire a guide or a hotel agent. Moreover, the terms and conditions of the hotels should not be overlooked especially about the mode of payment of the hotel charges.
Most of the times the hotels offer discount rates due to off season or to attract the customers enormously. Get the real chance to stay at luxury hotels in discounted rates in the top locations of the city. All such hotels have each and every facility for entertainment and recreation as well. The rooms are beautifully and tastefully decorated with lots of modern amenities along traditional or cultural arts which speak about the culture of the city. The motel restaurants offer mouthwatering meals and superb drinks which include cocktails and mocktail. The recreational venues like spa centers, clubs, bars, and open terrace lounge are also available.
After comparing discount hotel room rates online, please check out the location and the availability of rooms at the hotels where you want to make your stay during holidays.
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Are Buy to Let Hotel Rooms a Safer Bet? They Could be ..
The recent economic woes and collapse of the housing market is leading some investors to consider non-traditional property investments – specifically buy to let hotel rooms – as safer bets compared to traditional buy to let and renovation projects.
Under normal circumstances the phrase ‘non-traditional investment’ would not be associated with playing it safe, but the investment market at present is far from ‘normal’. The uncertainty in the financial markets and the collapse of both property prices and mortgage lending, have hit property investors hard. For those investors looking for a good place to park their retirement funds, safety and diversification are key factors.
The idea that you can buy hotel rooms might seem like a strange concept but its growing appeal is down to these very same motivators. Experienced hotel and resort development companies invite individual investors to buy hotel rooms within high-end hotel developments. Investors who buy hotel rooms see returns from both capital growth and regular income from rooms let.
Buy to let properties have always offered savvy investors a keen return, but as mortgage rates climb faster than rents can go up, many have been left out of pocket. Moreover any time the property stands empty means hefty monthly mortgage repayments and no income.
Buy to let hotel rooms offset these risks by basing the investors’ income on the performance of the hotel as a whole, not their individual suite, and so provide a regular income level. Even a half full hotel can provide a solid return on investment for private investors who buy hotel rooms.
Of course, having all your eggs in one investment basket is still a risky move, which is one of the reasons why buying hotel rooms is often viewed as a way to diversify an existing portfolio. Buying a hotel room is much more of an investment in tourism than a straight property play.
It’s a fact that particularly appeals to those planning for retirement as, provided you don’t need the free stays on offer, you can even buy hotel rooms via your self-invested personal pension (SIPP) scheme.
Case in point, a recent development in the upmarket tourist town of Sesimbra is offering freehold luxury suites on a buy to let basis.
Keen to attract secure investments the developer is also offering to cover all closing costs and paying cash back to early investors.
Of course, for those not buying via a SIPP, investors also get the perk of free stays in the hotel as well – a little bit of luxury to part the dreary economic clouds.
Adrian Warriner / Owner Invest are the UK-based specialists. For more information on how to buy hotel rooms and current developments in Portugal visit >>