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Are Buy to Let Hotel Rooms a Safer Bet? They Could Be

Recent economic worries and the virtual collapse of the mortgage market is pushing some private investors to consider alternatives to traditional property investments – specifically buy to let hotel rooms.

Under normal circumstances the phrase ‘non-traditional investment’ would not be associated with playing it safe, but the investment market at present is far from ‘normal’. The uncertainty in the financial markets and the collapse of both property prices and mortgage lending, have hit property investors hard. For those investors looking for a good place to park their retirement funds, safety and diversification are key factors. 분당룸싸롱

The idea that you can buy hotel rooms might seem like a strange concept but its growing appeal is down to these very same motivators. Experienced hotel developers allow private investors to buy hotel rooms within a, normally high-end, hotel development. Investors who buy hotel rooms see returns from both capital growth and regular income from rooms let.

Buy to let properties have always offered savvy investors a keen return, but as mortgage rates climb faster than rents can go up, many have been left out of pocket. Moreover any time the property stands empty means hefty monthly mortgage repayments and no income.

Buy to let hotel rooms offset these risks by basing the investors’ income on the performance of the hotel as a whole, not their individual suite, and so provide a regular income level. Even a half full hotel can provide a solid return on investment for private investors who buy hotel rooms.

Of course, having all your eggs in one investment basket is still a risky move, which is one of the reasons why buying hotel rooms is often viewed as a way to diversify an existing portfolio. Purchasing a buy to let hotel room is more of an investment in the tourism industry in the region rather than a straight property play.

It’s a fact that particularly appeals to those planning for retirement as, provided you don’t need the free stays on offer, you can even buy hotel rooms via your self-invested personal pension (SIPP) scheme.

Case in point, a recent development in the upmarket tourist town of Sesimbra is offering freehold luxury suites on a buy to let basis.

Keen to attract secure investments the developer is also offering to cover all closing costs and paying cash back to early investors.

Of course, for those not buying via a SIPP, investors also get the perk of free stays in the hotel as well – a little bit of luxury to part the dreary economic clouds.

 

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