The Reason Why So Many Are Picking A Room Investment In A Hotel?


In a post-war era, room investment in a hotel is not a new concept. It is now a growing investment sector in a lot of countries, especially in the UK which provides an alternative to the buy-to-let property with a continuous stream of limited occupants. Many of the investors, especially from America, purchase the luxurious rooms in the hotels of Europe with a surety that they are available when holidaying on the continent.

Nowadays, this trend has shifted towards pseudo timeshare arrangement. It is now more accessible to large number of people than it was in the past. Most importantly, it’s not only the wealthy people who invest in hotel rooms. Even the ordinary people like you and me take the advantage of these life-changing opportunities by investing their money in the right direction and at the right time. But what is the reason why so many are picking a room investment in a hotel? Let’s find out below:

Low Risk

It is one of the very few businesses where the chances of losing your money are quite low. When you are putting resources into an all-around perceived brand, you cannot discern any reason why it wouldn’t be a generally safe speculation.

No mortgage and low cash demands

Compared to buy-to-let property investment, hotel room investment is cheaper. It requires a low capital outlay than a house or flat. Most financial specialists who do put resources into a buy-to-let property will either require profound pockets or a home loan to subsidize most of the speculation. As of August 2016 by the Nationwide Index, the average house price in the UK was around £206,145 whereas the entire hotel investment started at £60,000. Definitely a good business in the UK!

Accessibility

Hotel investment becomes accessible to the masses when rich people invest their money into this business. All the large investment companies and smart global funds are enhancing their vulnerability to hotels and sometimes hotel investment funds are also available. Especially the private investors like to keep control of their money and so they prefer to buy the rooms instead of buying a hotel.

Guaranteed rental yield and buyback

Guaranteed rental yield and buyback removes another layer of risk from the investment. Rental yield makes an easy task to calculate return on investment whereas buy back stipulates that the management administration will purchase back your room after a given period for a contracted sum.

No admin required
It is an uncomplicated process as it does not need any admin nor it has any maintenance requirements. In addition, they don’t have any cost deductions to figure out nor have any tax rules to apply. It is also exempted from stamp duty. Perhaps, it is so straightforward than a normal individual can undoubtedly comprehend it.

Rapid results

It starts to show the results soon after you put the resources in a hotel room. Rental yield will make you earn the money quickly. Dissimilar to different speculations where the property may require overhauling, a lodging venture is generally prepared to go when the offer comes to showcase.

As the buy-to-let property investment is getting outdated in the UK, this hotel room investment is taking investors by storm. Now, several investors are diversifying their portfolio into this business due to the tax relief and exemption from stamp duty. I hope this comes out to be the rightful alternative to UK future property investment.

What Are Investment Hotels And Why Is The Sector Growing?

What Are Investment Hotels And Why Is The Sector Growing?

A special type of real estate investment, hotel investment is one which is booming across many parts of the world. Hotel investment is a branch of the hospitality industry which is a science as well as an art. In hotel investment, multiple parties are required to carry out different functions. The investment in hotel serve as an alternative to the traditional investment in the real estate realm; it serves as a diversification for the real estate investment.

Lately, the hotel investment sphere is increasing in popularity and high yields are surfacing for many investors. There is the hotel room investment which sees largely to purchasing hotel rooms and this tends to provide passive income in conjunction with regular and stable income. Hence, you might also want to ask: what are investment hotels and why is the sector growing?

Why the hotel investment sector is growing

In the UK, £5.5 billion was recorded in the year 2017 as the sum of the investment volumes in the hotel investment sector. Comparing this to the penultimate year’s assessment, it amounts to a 44% rise in investment activity in the hotel sector. Also, investors from overseas is booming and an increasing regional representation also manifests in the UK making up to 56% of the whole investment.

Furthermore, hotel rooms can be purchased in the UK and this will raise high yield considering the 2013 VisitEngland statistics of more than 10 million trips that are made domestically to the UK. The investment is passive and the capital tends to increase at a good rate. Unlike other investment form, purchasing a hotel room will not require a monitored maintenance or management.

Moreover, in some situations, hotel rooms’ purchase unlike other forms of purchases in many other sectors also allows for personal use. Holidays can be spent in the hotel rooms and a brief stay can be achieved with ease. This remains a promising investment option in the hotel investment sector with the strong passive income and a high yield and return.

In France, the WTO assessment shows an 837 million incoming international tourist coming into the region, and the INSEE rate shows an overall rating of France as the global attraction center for tourist.

These and more show the reason why the hotel investment sector is the new world’s choice in the real estate investment.

Even more, investment in hotels attract more investors with the following:

  • High rate of demand cutting across every season and region.
  • Attractive purchase of hotel rooms in the UK in regards to the stamp duty as a purchase which reaches £150,000 will not attract a UK Stamp duty.
  • All-time surge in the rate of passive income and in the yield of return for investors.
  • Regular and stable income which is long term.
  • Diversification means from real estate businesses.
  • Guest arrival booming in successive years with a sizeable amount of percentage increase in the amount of guest in hotels across the world.
  • The high affordability nature of the purchase of hotel rooms and the passive income therein keep attracting regional and oversea investors.
  • Ground rent and leasing also form major mediums for hotel investment.

Why Investing In Hotels Is Becoming An Alternative To Buy-To-Let


If you are considering investing in real estate, especially in the UK, then, UK hotel investments offer individual investors the chance to buy hotel rooms as part of a high-class investment. The investor benefits from the annual income, the increase in the value of tourist capital and the use of a hotel room as an exclusive holiday home with all additions of a top-class hotel.

Why Investing In Hotels Is Becoming An Alternative To Buy-To-Let

It can help reduce your risk of exposure.

When you invest in the purchase to rent a hotel room, your investment is less in the room, but in the success of the hotel as a whole. In general, buy summer apartments and hotel rooms together to earn the percentage of room rates in the entire hotel, not just in your room. One investment property can be empty for months, which means lost revenue, but hotel rooms attract guests throughout the year.

Enjoy the benefits of a beautiful holiday home – if you need it.

The most enjoyable of these benefits is the ability to access your purchase to allow a hotel room for your private use throughout the year. Whether it’s a short weekend to get away from work-related stress or an annual family vacation, buying a hotel room brings tangible benefits to any savings account.

You benefit from a capital appreciation and regular income.

The hotel rooms offer both regular income and potential for capital growth. In contrast to the purchase of a single property, however, buying hotel rooms can be an element of security. While your property may be empty when searching for tenants or vacationers, high-class hotel rooms will always be popular for everything from foreign tourists to ‘locals’ over the weekend. Hotel rooms also provide a higher rate per night than traditional holiday or private purchase options.

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It offers a low initial investment – and a decent return.

When it comes to investing in any property, current markets can make it very difficult to access the financial resources you need. These problems only occur when the property you want to invest in is the UK. When it comes to buying a hotel room, developers and agents will probably negotiate with the bank in advance to help future buyers – banks are often more likely to invest in the security of this type of investment carried out by experienced programmers and team managers.

Someone else manages all the daily problems.

Perhaps the biggest attraction of buying hotel rooms is the fact that an experienced and professional team is responsible for everything, from finishing and furnishing the rooms to repairing the broken toilets. Buy so that the owners will pay a high percentage to the management companies to take care of the daily needs of their property – when you buy hotel rooms, this service is built-in. Experienced management means existing contacts with travel agencies and tour operators, that is, proven marketing methods and extensive marketing budgets. It also means that as an investor you will never get a phone call from a die-hard neighbor or unsatisfied tenant. If so, then it is an ideal solution for investors who prefer to take advantage and leave hard work to someone else.

Why is Hotel Investments a Great Idea?

Whenever you are considering investing into something, you cannot eliminate the element of risk. Also, the regular commercial investments take years before you actually start making money out of it. With the developments in the basic lifestyles of people and at times boredom from a regular 9 to 5 job, it becomes necessary to have an active and steady source of income that allows you can achieve the dream of enhancing your lifestyle and secure your future.

If you have considered consultation with an advisor, you must be already convinced that you cannot invest without severe risks of losses. You probably end up wondering if there is a way where you can invest some money without the risk of losing it! Well if you have had any such thoughts, this could be a perfect read for you!


 

What are the Hotel Investments?

Hotel investments are one of the most flourishing investments in the property markets across the world. Investing in hotel properties in the UK are one of the hottest investments that serve as the best alternatives to the regular investments. Hotel property investments can make you rich and have the potential to give you immediate and definite incomes with minimum risks. Considering the massive expansion of UK’s hospitality industry and increased number of tourists every year, investing in hotel rooms can be one of the most attractive investments due to the fact that it requires very little money and lower risks.

Benefits of Investing in Hotel Rooms

Investing in hotel rooms has a wide number of benefits that make them one of the trendiest investments in the global property markets. The major benefits may include:

Lower Costs
As compared to properties that are bought and then receive incomes from the tenants, hotel investments prove to be smarter and more efficient alternatives as they make incomes from revenues generated when the room is booked. However, such commercial property investments could cost you a fortune initially and thus, it’s not a good investment idea for people who are beginners or are looking to invest lesser money.

Fair, Quick, and Consistent Returns
Investing in hotels that assure definite returns could help you with consistent cash cycles that can help you plan your future in a better and more convenient way. These investments mature really quickly and enable you to draw benefits from them right after you have made the investments, unlike the commercial investments that take years to mature.

Simple Process
Hotel room investments are one of the easiest ways to create active incomes without going through a lot of procedures. Once you buy the room and get it registered, you are all set to draw periodic incomes from it. You also do not have to worry about the marketing and maintenance because the hotel takes care of it. Smooth tax returns and reviews make hotel investments one of the most intelligent investments in the UK.

To sum up:
We can safely say that hotel property investments can make you rich infraction of times as compared to other commercial investments!

https://www.savills.co.uk/research_articles/229130/209107-0

What a Hotel Investor Needs to Know about 2018’s Property Market

With the increase in the demand for the residential areas the prices of the property also increases. Real estate investing has changed over the years, and the investors are practising new techniques to reach the new level of success. Now the question arises that what does the investor do in the real estate? The main aim of the investor is to buy the property and make improvements to sell it for a profit. In large cities where the property prices are reasonable, investors can invest in the leasing of hotel properties.

Here are few points hotel investors need to know about 2018’s property market:

• Analyse the market value: – To invest in the hotel property, the investor must analyse the market value. This critical factor will be considered in the growth of the hotel segment. The income for future sale should estimate the income-producing properties such as hotels. The revenue benefits can be viewed as the factors for market value. Hotel’s future earnings can be expected when the appraiser forecasted future income through capitalisation process and discounted cash flow analysis. Use of the income approach can also calculate the market value. Investors should analyse the cash flow of that hotel before investing.

Developing assessment strategies: – With the upcoming technologies, in 2018’s real estate market, the criteria of decision-making methodologies are used in developing assessment strategies. The main factors included in the development of assessment strategies for hotels are financial and location factors. Other subfactor consists of the decision making while investing in the marketplace. Investors need to explore the latest strategies and management techniques to pursuit the strategic vision.

Effective forecasting: – For the hotel investment to be successful, we must have accurate and reliable data about the different aspects of hotel operations such as revenue and cash flows. For determining the detailed forecast and evaluations, we must make the use of sophisticated tools present with 2018’s new technologies. Understanding the hotel forecasting is the ultimate resource for anticipating the future performance of hotel key metrics. The accurate prediction will increase the predictability of the duration. If the investors do not focus on the forecasts, then it will diminish the hotel’s revenues and profit margins.

Sales and marketing: – The maximum return can be achieved through the meticulous approach to sales and marketing techniques. If we consider new strategies for sales, then it will provide us with the excellent opportunity to increase profitability. We can develop custom plans for marketing and sales like Digital advertising, Revenue Management and social media strategies. Online channel content and graphics monitoring are the two new strategies came into existence which resulted in increased sales.

Concept Development: – A great hotel concept can fasten the growth of investment in hotels. Strong Business development and creative mindset will lead to the development of boundary-breaking hotels which will eventually increase the investors. The concept of developing the hotels must connect the people at an emotional level, and this will automatically boost the growth of investors. An excellent hotel concept should attract and retain talent and should maintain a streamline communication with guests. So the investors should keep a check in the infrastructure, designs and architecture of hotels before investing.

Sources:
www.crowdstreet.com
economictimes.indiatimes.com
www.forbes.com
www.investopedia.com
realestate.union-investment.com
www.xotels.com
www.hospitalitynet.org
en.wikipedia.org
www.researchgate.net
www.hospitalityeducators.com