Booking a hotel room as a long term investment is the latest niche market for investors.
The strategy is straightforward -
- You buy a room in a hotel for between £50,000 and £250,000 0n a 999 year lease.
- You can stay in your room for free 52 nights a year
- The hotel lets out the room for the remaining nights at usual rates
- You generally receive 50% of the room income
The investment and income can go in to a self-invested personal pension (SIPP) for tax-free growth.
The first UK company to offer hotel room investment was Guest Invest, which has stakes in several London hotels.
Outside London, Owner Hotel is
selling rooms in two four-star hotels in York and Hull.
Development of another hotel in Hull is also in the pipeline.
Four Pillars is selling buy-to-let hotel rooms at a Cotswold water park.
The latest company to enter the market, Galliard Homes, is building a 900-room buy-to-let hotel near the House of Commons.
The risks are you are relying on the hotel management to sell your room and no established resale market for the rooms exists if you want to dispose of your investment.
Also, this is very much a cash investment as no mortgage funding is available.
‘Studies in the US suggest capital appreciation will mirror the mainstream housing market,’ says David Galman, of Galliard Homes. |
