Buying hotel rooms

Zorzi

Has anybody invested in hotel rooms? Some of the yields mentioned are very good 8 to 14%

HappyMJ

Zorzi wrote: »

Has anybody invested in hotel rooms? Some of the yields mentioned are very good 8 to 14%

LOL...no. It isn't going to work. The bank will lend the hotel the funds at a much cheaper rate. You would be lucky to make much of a profit at all from it.

Reaper

You haven't named the companies you are looking at but I expect those yields are "guaranteed" for the first couple of years then you are on your own. Even the guarantee depends on the company remaining solvent. And finishing building the hotel if it is new.

Far too much risk for my liking.

droopsnoot

I've looked at this in the past and come to much the same conclusion - the rental guarantees aren't really much help, and no help at all if the guarantor isn't around to honour them in a few years time. I consider these as discounts on purchase price. Same for "optional developer buyback in xx years" - how easy is it for the developer to shut the company in the meantime and start up again, leaving you with no comeback.

stuzhunter

I've heard that some people live permanently in hotel places such as Travelodge.

Buy_It_Now

stuzhunter wrote: »

I've heard that some people live permanently in hotel places such as Travelodge.

There was a tv program about a couple who found it cheaper :money: to live in a Travelodge @£90 a week than rent a house.

http://news.bbc.co.uk/1/hi/england/lincolnshire/6988927.stm