Hotel rooms are not the most obvious choice of property investment—indeed, the idea may never have occurred to many—but their popularity is expected to increase this year, largely due to the 3% Stamp Duty surcharge that came in last year on second homes. Hotel rooms are exempt from this surcharge because they’re classed as commercial investments.
‘Investors were initially cautious, but the model is proving its worth,’ explains Jean liggett, Ceo of Properties of the World. ‘Fixed returns, a transparent process and a clear exit strategy look set to make hotel-room investments boom in 2017. that 68,777 hotel rooms were in construction across europe during December—a year-on-year increase of 13.1%—shows the scale of opportunities available.’
the process is simple: buy a room, then lease it back to the hotel in return for a slice of guest revenue (usually a set amount). At the end of the lease, the hotel owner buys the room back—the (normally increased) price is set at the time of initial sale.
other advantages are that the lease on a hotel room is cheaper than most property investments, someone else cares for the property and its tenants and returns can be high. the small downside is the investment’s lack of liquidity.
Hotel rooms currently for sale start at about £40,000. Contact Properties of the World (www.propertiesoftheworld.co.uk), Property Frontiers (www. propertyfrontiers.com) or Invest In Rooms (www.investinrooms.com). Roderick Easdale