Investing in a hotel room?
Discussion
Leicesterdave said:
Is it generally considered a good idea?
Seems a good one from the point of view that you can sit back and relax and not worry about tenants wrecking your place if going down the traditional buy to let route.
Too good to be true??
Why is the building owner selling the room?Seems a good one from the point of view that you can sit back and relax and not worry about tenants wrecking your place if going down the traditional buy to let route.
Too good to be true??
Quite a few of them were heavily advertised before the credit crunch and they all went tits up!
Biggest problem with them is you don’t know the actual value of the unit (can’t be equated to a flat/house or share price ) and secondly they are illiquid - where would u sell a hotel room? ( I assume only back to them or through them ) where as other investments such as residential/commercial property or shares/funds can be sold through multiple channels , I think one would be stuck with these hotel rooms as there is no channel/ Avenue to resell.
Also I assume they will have huge management fees that will only increase as well as other additional costs.
What happens if hotel company go bust ?
Biggest problem with them is you don’t know the actual value of the unit (can’t be equated to a flat/house or share price ) and secondly they are illiquid - where would u sell a hotel room? ( I assume only back to them or through them ) where as other investments such as residential/commercial property or shares/funds can be sold through multiple channels , I think one would be stuck with these hotel rooms as there is no channel/ Avenue to resell.
Also I assume they will have huge management fees that will only increase as well as other additional costs.
What happens if hotel company go bust ?
or 'investment' companies that will sell you some car parking spaces at the airport.......
you pay over the odds as an initial investment, the company selling you these have already made their profit at this point.
how do you know that 'your' room is the room they sell/ have occupied? what do you do when suddenly the room needs a massive redecoration/ upgrade? what do you do when they suddenly charge you more in 'admin fees' that you make in income in room being let? what do you do when you go to sell the room- can you even get deeds to a single room in a building? how's gonna buy a single hotel room that doesnt generate any income? if the hotel was so profitable why would you want to share that profit with anyone.......
you pay over the odds as an initial investment, the company selling you these have already made their profit at this point.
how do you know that 'your' room is the room they sell/ have occupied? what do you do when suddenly the room needs a massive redecoration/ upgrade? what do you do when they suddenly charge you more in 'admin fees' that you make in income in room being let? what do you do when you go to sell the room- can you even get deeds to a single room in a building? how's gonna buy a single hotel room that doesnt generate any income? if the hotel was so profitable why would you want to share that profit with anyone.......
No no no no no no.
There are a load of "student rooms" that come up for sale several times a year in auctions / with unknown estate agents in "montgomery house" manchester
Basically people trying to get rid at any cost, they never seem to sell.
Seems the scam is pretty much...
Sell hotel room / student room / storage unit
Give "guaranteed rent" to the "customer" for 2years/3years/5years (paid for by sale of more rooms)
Setup your own management company managing the rooms that charges exorbitant fees/management charges that eat up any income from the rent
Buyer is stuck with a completely illiquid, non performing "asset"
I used to loosely "know" the owner of a company that have done all the above. Sold overseas property "opportunities", hotel rooms, student rooms, carbon credits, wine. Basically same people behind them all - doing some variation of the above.
There are a load of "student rooms" that come up for sale several times a year in auctions / with unknown estate agents in "montgomery house" manchester
Basically people trying to get rid at any cost, they never seem to sell.
Seems the scam is pretty much...
Sell hotel room / student room / storage unit
Give "guaranteed rent" to the "customer" for 2years/3years/5years (paid for by sale of more rooms)
Setup your own management company managing the rooms that charges exorbitant fees/management charges that eat up any income from the rent
Buyer is stuck with a completely illiquid, non performing "asset"
I used to loosely "know" the owner of a company that have done all the above. Sold overseas property "opportunities", hotel rooms, student rooms, carbon credits, wine. Basically same people behind them all - doing some variation of the above.
i have 2 clients with these. i never arranged any of the finance or purchase, only came across them a few years after they bought them. 1 is in Manchester, 1 is in London. Both return decent returns after deducted Hotel commission and cleaning costs - although there are ups and downs.
i wouldn't automatically discount it - just get a shed load of information, facts and figures and go in with your eyes open.
if i was in your shoes - i'd probably spend the cash on a 2 up/2 down house - whilst the return won;t be anywhere near as good, to me its less complicated and it'll only be me and the 1 x tenant, instead of the hotel being involved.
i wouldn't automatically discount it - just get a shed load of information, facts and figures and go in with your eyes open.
if i was in your shoes - i'd probably spend the cash on a 2 up/2 down house - whilst the return won;t be anywhere near as good, to me its less complicated and it'll only be me and the 1 x tenant, instead of the hotel being involved.
trowelhead said:
No no no no no no.
There are a load of "student rooms" that come up for sale several times a year in auctions / with unknown estate agents in "montgomery house" manchester
Basically people trying to get rid at any cost, they never seem to sell.
Seems the scam is pretty much...
Sell hotel room / student room / storage unit
Give "guaranteed rent" to the "customer" for 2years/3years/5years (paid for by sale of more rooms)
Setup your own management company managing the rooms that charges exorbitant fees/management charges that eat up any income from the rent
Buyer is stuck with a completely illiquid, non performing "asset"
I used to loosely "know" the owner of a company that have done all the above. Sold overseas property "opportunities", hotel rooms, student rooms, carbon credits, wine. Basically same people behind them all - doing some variation of the above.
There are hundreds of these student rooms for sale in Liverpool at the moment guaranteed 7,8,9% return on your investment for 2,3,4 years type thing they are springing up everywhere. There are a load of "student rooms" that come up for sale several times a year in auctions / with unknown estate agents in "montgomery house" manchester
Basically people trying to get rid at any cost, they never seem to sell.
Seems the scam is pretty much...
Sell hotel room / student room / storage unit
Give "guaranteed rent" to the "customer" for 2years/3years/5years (paid for by sale of more rooms)
Setup your own management company managing the rooms that charges exorbitant fees/management charges that eat up any income from the rent
Buyer is stuck with a completely illiquid, non performing "asset"
I used to loosely "know" the owner of a company that have done all the above. Sold overseas property "opportunities", hotel rooms, student rooms, carbon credits, wine. Basically same people behind them all - doing some variation of the above.
Totally agree with all the wise warnings not to buy a hotel room.
If you want financial exposure to the hospitality sector, buy shares in a hotel company.
IIRC, theseinvestment opportunities scams offer an uncertain income, based on the hotel operator's version of occupancy in your individual room, (after filling rooms owned by the operator of course) less their massive management charges. Then all non-occupancy income (bar, restaurant, gym/spa, porn, etc) goes to the hotel operator. Great business for them, not so good for you.
If you want financial exposure to the hospitality sector, buy shares in a hotel company.
IIRC, these
BoRED S2upid said:
There are hundreds of these student rooms for sale in Liverpool at the moment guaranteed 7,8,9% return on your investment for 2,3,4 years type thing they are springing up everywhere.
That assumes that the company is still around to pay you those ‘guaranteed’ returns!stut4 said:
i have 2 clients with these. i never arranged any of the finance or purchase, only came across them a few years after they bought them. 1 is in Manchester, 1 is in London. Both return decent returns after deducted Hotel commission and cleaning costs - although there are ups and downs.
i wouldn't automatically discount it - just get a shed load of information, facts and figures and go in with your eyes open.
if i was in your shoes - i'd probably spend the cash on a 2 up/2 down house - whilst the return won;t be anywhere near as good, to me its less complicated and it'll only be me and the 1 x tenant, instead of the hotel being involved.
For how many years? It’s normal to pay the first few out to enable the scheme to keep going.i wouldn't automatically discount it - just get a shed load of information, facts and figures and go in with your eyes open.
if i was in your shoes - i'd probably spend the cash on a 2 up/2 down house - whilst the return won;t be anywhere near as good, to me its less complicated and it'll only be me and the 1 x tenant, instead of the hotel being involved.
I have never heard of one of these which is not a scam., which ones are your clients in?
Joscal said:
Trump used to offer this in his earlier days, read into that what you will!
Think you might be confusing what Trump was selling condo hotels (apartments with hotel services ) mainly for living in where as the OP is referring to an overpriced hotel room in some 2bit hotel sold as an investment based on artificial rent/yield https://en.m.wikipedia.org/wiki/Condo_hotel
BoRED S2upid said:
There are hundreds of these student rooms for sale in Liverpool at the moment guaranteed 7,8,9% return on your investment for 2,3,4 years type thing they are springing up everywhere.
So many people are going to lose their trousers here! Thousands of additional student flats have been built in Cardiff - far less regs like 'minimum living space' and planning hurdles required for student housing - muppets in council OK everything.... They will NEVER fill them plus there is a downturn in overseas students happening but they are still guaranteeing high yields to investors. Will end in tears...
jonny70 said:
Think you might be confusing what Trump was selling condo hotels (apartments with hotel services ) mainly for living in where as the OP is referring to an overpriced hotel room in some 2bit hotel sold as an investment based on artificial rent/yield
https://en.m.wikipedia.org/wiki/Condo_hotel
I read his book years ago so wasn't sure. I stand corrected!https://en.m.wikipedia.org/wiki/Condo_hotel
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