Why Should I Invest?
Worcester Hotel
Investment
Unlike regular buy-to-lets, where the landlords want to find long-term tenants who are willing to cope with the uncertain rental market price increases, hotels are geared towards tourists who stay for the short-term, but are willing to pay the one-time hotel rates during their holiday or business trip.
Many investors hold back on residential buy-to-lets because they don’t know if they’ll be able to find tenants, but there will always be a demand for hotel rooms, especially in places where the tourism is booming. Many people experience this when they go to book a hotel room last minute, and there are none available for the dates they want.
Like a number of other alternative property investments, hotel room investments are exempt from stamp duty and capital gains tax and as a result there has been a lot more focus from investors on the commercial sector . Conversely the increase in Stamp Duty along with decreases in tax relief have made regular buy-to-lets unattractive and less profitable, encouraging investors to look into diversifying their portfolio with other property investments so their income is not compromised.
Leaving all your eggs in one basket can be risky because if the market or property legislation changes, your entire portfolio will suffer if it’s not diversified. So it makes sense to join the increased numbers of income and growth-hungry investors by investing in a hotel room.
Leaving all your eggs in one basket can be risky because if the market or property legislation changes, your entire portfolio will suffer if it’s not diversified. So it makes sense to join the increased numbers of income and growth-hungry investors by investing in a hotel room.
Hotel Room Investments Can Diversify Your Portfolio
Fully managed
You won’t need to manage the hotel room or try to fill it, so if you haven’t yet got the skills or experience to manage a property, this hassle-free investment is right for you. There are no management fees coming out of your 6% annual return. The hotel management company will be incentivised to perform by the hotel owner, so they will be paid out of their profits.
Stamp duty exempt
Residential buy-to-let owners and investors have been affected by the increased stamp duty of 3%, which has taken its toll on the investor’s profits. Commercial properties such as hotels are not required to pay stamp duty tax costs.
No further admin/management fees after purchase
After you purchase the property through a property consultancy agency, the admin and management fees are usually included in the price, so no further payments will be taken from your account. After investment period of 5 – 10 years you can get your initial capital back plus assured capital gains by activating the buy-back clause. Your income each year will remain at 6% and may even increase over time.
