The Rise Of Hotel Room Investments
Hotel room investments have been around for quite some time now. Recently, they have soared in popularity. It is an intriguing hands-off investment that comes with guaranteed returns. So what are they all about?
What Are Hotel Room Investments?
Hotel room investments are a short term investment. They are sold individually and then leased back to the hotel company at a fixed price. Generally, there is a buy-back option after between 5-10 years. Once the allotted time has elapsed, the hotel group will purchase the room from you at a slightly increased price. Hotel room investments are entirely hands-off. Even after you have purchased the room, the hotel still has the responsibility of booking it out.
Short Term Investment
Hands-off property investment usually means buying a house or a flat which you rent out with the help of management companies. There is no doubt this method has worked for years and will likely continue to work in the future. It is a long term investment. However, there are other hands-off property investments available. With these, you need not trouble yourself with finding a management company. It is a venture called a hotel room investment. You simply buy it and leave it. The hotel is in charge of selling the room to customers, leaving you with nothing to worry about. Rather than being a long term investment as is the case when you purchase rental property, it is short term.
Why Do Hotels Temporarily Sell Their Rooms?
Quite often, large hotel companies decide to sell a selection of rooms temporarily in order to raise the funds for renovations. Of course, they could just go to a bank and ask for a loan. However, with this comes the issue of high interest rates. By selling off hotel rooms to eager investors, they acquire the sum needed while deciding how much they pay back to the investor. Essentially, the total amount they pay to the investor ends up lower than the interest they would pay to a bank. All the while the investor benefits from fixed rates at the same time. It’s a win-win for all.
Investing Into A Company
Although it is a form of property investment, it is also an investment in the company. Purchasing a property usually means the seller walks away after receiving their money. A hotel room investment is slightly different. The seller still has extensive involvement after the sale. In actual fact, they have more participation than the buyer. Essentially, the investment is slightly swayed more toward a company investment than a property one. Because of this, due diligence is always needed. Before investing in a hotel room, knowing how the company operates is beneficial. After all, they will be responsible for managing your investment and making payments to you.
Buy Back Options
Some hotel room investments are available with a buyback option at the end of the fixed rate period. Hotels that sell off their rooms to raise money for renovations usually include the buyback option. This way, they can secure ownership again at a later date. For investors, it makes sense to sell the hotel room back to the hotel as they would have likely made good profit on the room by this point. The investors do understand the hotel will do a better job of advertising, booking, and managing the room. Therefore, they are more than happy to sell the room back to the hotel. They can choose to invest their monetary gains in another project.
Hotel room investments include serviced apartments. Usually, these developments are located in city centres and feature a fully equipped kitchen. Each investment is different. Some work with a buyback clause while others involve paying the hotel group for their services. There are pros and cons to all investment opportunities. Ensure to consider each thoroughly before making a monetary commitment.
A Chance to Make a Hotel Room Liverpool Investment Property
Situated in the very heart of the commercial district, the Colonial Chambers Dream Pod hotel investment is in a prime location. Now in the second phase of the development, Colonial Chambers offers some of the highest quality and stylish accommodation in the area. Each apartment is designed to give the home away from home feeling where guests can truly relax in comfort. Also offering the services, you would expect from a professional hotel group. Some key features of this serviced apartment investment include:
- 8% NET guaranteed for 10 years (15-year operator lease)
- A proven and established serviced hotel operator
- Stylish furniture packs available
- Located in the heart of the city of Liverpool, within walking distance to fantastic bars, restaurants, tourist spots, and shops
- A highly experienced developer
Why Liverpool Investment Property?
Liverpool is one of the UK’s most popular cities for tourism. It is also one of the fastest growing cities in the country. With its rich culture imprinted on its streets and its social buzz, Liverpool is one of those places with something to suit everyone. In October 2018 the infamous Giants event returned to Liverpool bringing with it 1.3 million people. Just one of the many events the city hosts every year. Over the years Liverpool has garnered a reputation for its continuous inward investments. One of the newest being the £5.5 billion development project, Liverpool Waters. It is a city that continues to better itself, which is evident from the influx of new businesses and impressive economic growth. You can read more about the city’s charm in our City Vibes – Liverpool article.
Are You Ready to Invest?
Hotel rooms as Liverpool investment property present an attractive opportunity. One with very little involvement on your part. They are the true definition of ‘arm-chair investments’. Your returns are guaranteed for up to 15 years. The hotel rooms start at a very affordable price and can give you a taste of property investment.
Although the opportunities are fairly in-depth, look thoroughly into the opportunity before making a final commitment. Pay particular attention to the developers and the hotel company. With its guaranteed returns and short-term investment period, hotel room investments do tick plenty of boxes.