Room ser­vice?

Country Life Every Week - - Property News -

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

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