If you relish the thought of hotel investment, you might find that buying an entire hotel is well out of your price range. The thought then, that you could own your very own, fully managed hotel room or suite, for which you own the freehold, could be a highly appealing one, particularly if it is located in a place where you dream of owning a holiday home.
Hotel investments using the leaseback system largely began in the USA and France, and have become hugely popular phenomena in many areas worldwide.
The concept is simple:
- Buy the freehold outright
- Lease the freehold back to a management company for renewable periods of up to 10 years.
- Receive guaranteed rental returns from the management company, irrespective of occupancy levels. This rental often offsets the cost of your mortgage, giving entire peace of mind.
- Benefit from holidaying in your property yourself, in a luxury location you might otherwise only dream of.
- At the end of the lease period, either choose to live in the property or sign a new leaseback contract with the management company.
Hotel investment companies can supply you with details of freehold hotel room investments that allow you to buy the freehold of a holiday home in a fantastic tourist location with free pools, gyms and other recreational facilities to use as your own. Because of this, your property is already well located and has all the amenities that renters require, rendering it a valuable, high demand property that will sell or rent easily.
Another advantage of hotel room investment is peace of mind: regular, guaranteed rental income means that you are not held victim to local fluctuations in the property market and tourist industry. In addition, the day-to-day management and maintenance of your hotel room is left to the management company who you have leased it to. In reality, your hotel room investment practically runs itself, allowing you to adopt a hands-off approach, while reaping in the returns at the exit of your investment. And if, one room is not enough, then hotel investment funds allow you to own more than one hotel property, as part of a diverse, fully managed, international property investment portfolio.
*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.
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