Buy-to-Let Hotel Room
Discussion
I've seen a few ads recently on buy-to-let investments around the city of London. Has anyone invested in hotel rooms? They are advertising a return of 5-6%.
How does it work? So you purchase a room, presumably the hotel takes cares of renting out the room to hotel guests as per usual and the cleaning and repairs etc. Is there a surcharge for this?
Also are these rooms sold on leasehold or share of freehold basis and do the usual service charge and ground rent still apply?
How does it work? So you purchase a room, presumably the hotel takes cares of renting out the room to hotel guests as per usual and the cleaning and repairs etc. Is there a surcharge for this?
Also are these rooms sold on leasehold or share of freehold basis and do the usual service charge and ground rent still apply?
It's one of those things that has become popular because the unit price of a resi property is too high for the retail investment masses.
On paper it seems logical.
However, the one simple question to be asking is just why would a firm want the enormous cost of raising money from the retail market, the enormous administration cost of managing hundreds of small investment units and pay a yield well above market when all you need to do is pick up the phone and get all the money you need, a few hundred bp over and from one source?
The answer is because the smart money has already looked at the project and people involved and told them to jog on.
The real problem with retail investment in an institutional market/product is that retail only gets to see the absolute crap that the worst run fund has already turned down.
On paper it seems logical.
However, the one simple question to be asking is just why would a firm want the enormous cost of raising money from the retail market, the enormous administration cost of managing hundreds of small investment units and pay a yield well above market when all you need to do is pick up the phone and get all the money you need, a few hundred bp over and from one source?
The answer is because the smart money has already looked at the project and people involved and told them to jog on.
The real problem with retail investment in an institutional market/product is that retail only gets to see the absolute crap that the worst run fund has already turned down.
digger_R said:
I assume the same applies to all these 'investments' offering 10-12% on student housing etc?
I just fail to see, if those yields exist after administrative costs, how they get anywhere near the retail market. The only reason you go to the retail sector is either because your project is so crap you can't get bank or inst funding. Or because you are running a sales centre that takes most of the retail investment raised as fees.
I bet if you drill down to who is running these achemes youll find names synonymous with fine wines, gold coins, bamboo and planning permission parcels.
And just like those planning permission parcels, what sane fund is going to buy a commercial asset that is so tied in with costly, high hassle collective retail investments?
There may well be some kosher schemes as the scams need them to legitimise the market but the whole thing smells of geezer kids claiming to be called Sebastian from Winchester cold calling to lonely ukip voters who have just inherited some cash or drawn down on their pension.
a) they are s
t that banks won't touch
b) illiquid, good luck trying to sell that investment on.
c) capex, hotel and student both capex heavy
d) it's the next 'timeshare' scandal. I think select student offer 10+% on guaranteed rent for 3 years. at which time you'll get the real 3% and your investments worth sweet fk all
t that banks won't touch b) illiquid, good luck trying to sell that investment on.
c) capex, hotel and student both capex heavy
d) it's the next 'timeshare' scandal. I think select student offer 10+% on guaranteed rent for 3 years. at which time you'll get the real 3% and your investments worth sweet f
k all DonkeyApple said:
I bet if you drill down to who is running these schemes you'll find names synonymous with fine wines, gold coins, bamboo and planning permission parcels.
Your comments have been spot-on in this thread, so I'm struggling to add to them. However, I am aware of a couple of companies offering these buy-a-unit schemes (be it hotel or student), and you'll find their directors wound up buy-to-let residential development companies in the boom owing hundrdeds of millions of pounds. Ultimately they've just found another was of fleecing potential investors.z4RRSchris99 said:
b) illiquid, good luck trying to sell that investment on.
d) it's the next 'timeshare' scandal. I think select student offer 10+% on guaranteed rent for 3 years. at which time you'll get the real 3% and your investments worth sweet fk all
The two key points. It all looks great until you try and get your capital back. Same with airport car parking spaces, which is another one I've been asked about recently. If you can't get access via a UK regulated fund vehicle, there's probably a good reason for that.d) it's the next 'timeshare' scandal. I think select student offer 10+% on guaranteed rent for 3 years. at which time you'll get the real 3% and your investments worth sweet f
k all Student schemes that are affiliated with the nearest university are very good investment but as a retail investor you'll get nowhere near to these. The institutional investors will keep them, the only stuff that appears retail is the dogst.
A private student block has to compete with student HMO's, conventional houses rented to students, on campus accommodation and off campus university affiliated schemes.
Most universities no longer have a shortage of accommodation for first year under graduates and/or foreign students, if the university does have a shortage today expect it disappear medium term with a university affiliated scheme backed by institutional investors.
In terms of hotel rooms then it's buyer beware check the operator, master brand, exit terms, refurbishment term. Hotel bedrooms need refurbishment every 10 years if representing one of the major master brands as the room "owner" you may have to pay for this.
t. A private student block has to compete with student HMO's, conventional houses rented to students, on campus accommodation and off campus university affiliated schemes.
Most universities no longer have a shortage of accommodation for first year under graduates and/or foreign students, if the university does have a shortage today expect it disappear medium term with a university affiliated scheme backed by institutional investors.
In terms of hotel rooms then it's buyer beware check the operator, master brand, exit terms, refurbishment term. Hotel bedrooms need refurbishment every 10 years if representing one of the major master brands as the room "owner" you may have to pay for this.
Here's one that just arrived in my spam box
said:
Regarded as one of the most important historic buildings in private hands in the UK
10% return for first two years
18-hole golf course designed by legendary designer James Braid in 1925
Strictly limited opportunity
Highland Tay Retreat Golf and Spa Resort is a one-off. Set in stunning grounds at the gateway to the Scottish Highlands, this substantial estate represents an incredible property ownership opportunity.
As an owner of a luxurious hotel suite, you will receive a rental return of 10% of the purchase price per annum for 2 years from completion, or you can use your suite instead.
You can be part of history by owning a luxury suite inside the very castle that royalty has stayed in. You’ll be metres from a hall that was used as a film location in the 1997 'Her Majesty, Mrs Brown film starring Dame Judi Dench. One of the state rooms has a ceiling that is insured for over £10million.
What you’ve just read is just a taster of the magnificence. Click below to find out more.
Such a great investment opportunity that they have to resort to spam to sell it?10% return for first two years
18-hole golf course designed by legendary designer James Braid in 1925
Strictly limited opportunity
Highland Tay Retreat Golf and Spa Resort is a one-off. Set in stunning grounds at the gateway to the Scottish Highlands, this substantial estate represents an incredible property ownership opportunity.
As an owner of a luxurious hotel suite, you will receive a rental return of 10% of the purchase price per annum for 2 years from completion, or you can use your suite instead.
You can be part of history by owning a luxury suite inside the very castle that royalty has stayed in. You’ll be metres from a hall that was used as a film location in the 1997 'Her Majesty, Mrs Brown film starring Dame Judi Dench. One of the state rooms has a ceiling that is insured for over £10million.
What you’ve just read is just a taster of the magnificence. Click below to find out more.
Simpo Two said:
Here's one that just arrived in my spam box
That's good old Taymouth Castle. Several companies have gone to their grave trying to redevelop it. said:
Regarded as one of the most important historic buildings in private hands in the UK
10% return for first two years
18-hole golf course designed by legendary designer James Braid in 1925
Strictly limited opportunity
Highland Tay Retreat Golf and Spa Resort is a one-off. Set in stunning grounds at the gateway to the Scottish Highlands, this substantial estate represents an incredible property ownership opportunity.
As an owner of a luxurious hotel suite, you will receive a rental return of 10% of the purchase price per annum for 2 years from completion, or you can use your suite instead.
You can be part of history by owning a luxury suite inside the very castle that royalty has stayed in. You’ll be metres from a hall that was used as a film location in the 1997 'Her Majesty, Mrs Brown film starring Dame Judi Dench. One of the state rooms has a ceiling that is insured for over £10million.
What you’ve just read is just a taster of the magnificence. Click below to find out more.
Such a great investment opportunity that they have to resort to spam to sell it?10% return for first two years
18-hole golf course designed by legendary designer James Braid in 1925
Strictly limited opportunity
Highland Tay Retreat Golf and Spa Resort is a one-off. Set in stunning grounds at the gateway to the Scottish Highlands, this substantial estate represents an incredible property ownership opportunity.
As an owner of a luxurious hotel suite, you will receive a rental return of 10% of the purchase price per annum for 2 years from completion, or you can use your suite instead.
You can be part of history by owning a luxury suite inside the very castle that royalty has stayed in. You’ll be metres from a hall that was used as a film location in the 1997 'Her Majesty, Mrs Brown film starring Dame Judi Dench. One of the state rooms has a ceiling that is insured for over £10million.
What you’ve just read is just a taster of the magnificence. Click below to find out more.
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