buy-to-let hotel rooms?

guppy

tucbiscuit wrote: »

and to some people who seem overly negative, I was just inquiring and throwing something out there to discuss, not saying it is amazing or anything, I don't know much about it and probably nor do you, so kiss my ******* ****

Apologies for my earlier negativity. Go ahead, throw your life savings in. Great idea

paulos1969

As someone who has knowledge of both buy to lets and traditional hotel finance this may be of help.

The guaranteed returns are usually for the first year, with the room income share from year 2 onwards. This distinction must be borne in mind before entering into any contract.

Historic hotel performance is another way to guage the long term safety of the investment. A well established hotel with a successful track record is a good indicator of future potential. A new start hotel in a prime location (near an airport, city centre etc) is also a good indicator, though one has to be aware of competition.

The mortgage industry has been slow to take up the financing of these schemes so most of the funding available is via the vendors with the investor putting in around 25%. The caution showed by the industry might well be caused by the difficulty in valuing a hotel room on a re-sale basis. I know of 2 valuers who have been posed this question and am waiting for responses.

The share of room income is in proportion to the overall value of the rooms sold. IE someone paying £240k for a room will get double someone paying £120k. The income is pooled before sharing so that there is a fair distribution.

The maintenance of the hotel is dealt with by the management company running the hotel and comes from the profit made off their room share plus the restaurant, health club, bar etc.

For the hotelier it is a good scheme to build up a portfolio of hotels quickly and without too much personal exposure or cash.

For investors the right hotel offers better than market returns. The pros are: no need to find tenant, no unpaid fuel bills, no voids, no public liability, no regular services checks, no vandalism, shared risk, decent return on cash invested, professionally managed. Cons: return linked to performance, not as readily realisable, few mortgage companies provide funding.

It certainly isn't timeshare, not all offer the free use. The decesion to invest is down to personal choice, people who got involved in the early Guestinvest schemes are making decent returns. So long as the hotel is profitable and in the right location and doesn't discount sell too much the investment should be fairly safe. The acid test in all these type of things is will you get your money back if it goes wrong - this no one can really answer, though one suspects that your initial investment should be recoverable.

Hope this helps

tucbiscuit

yes, that was helpful thanks paulos1969.........I got sent this after emailing them;







Dear Mr. *******



Many thanks for your recent enquiry regarding our Hotel Room Ownership concept, I enclose below the answers to your questions, but if you could let me have an address I would be very happy to forward to you amore detailed package of information in hard copy.



Firstly, at the moment we have the following rooms available:



The Hull Pod Hotel

Single Pod Hotel Rooms £49,950.00



Double Pod Hotel Rooms £59,950.00



Double deluxe Pod Room £69,950.00



The Jorvik Hotel York

We have one Deluxe Suite/Family room available at York which is priced at £150,000.00



All of the above, as with all of our Hotel rooms have the benefit of receiving a minimum Guaranteed 10% return payable monthly for the first two years. Because of the high demand for rooms in both Hull & York we full anticipate these returns will be exceeded in all cases.



As for open days, at the moment it will probably be next year before we have another one, but as York is almost completely refurbished now I am more than happy to offer to put you up there for a night and treat you to dinner and show you first hand how one of our ‘Owner Hotel’s’ works, in the flesh as they say!!



I hope that this helps, but should you need more information please feel free to contact me any time on *********** when I will be more than happy to answer any further questions you may have.



I look forward to hearing from you.



Kind Regards



**** *******

lynzpower

Well theres a free night in York on the cards, Id take that! DOesnt york have a pub for very day or something?

paulos1969

Having looked closely at the various models out there -all are much of a muchness. It seems to me that the key consideration in this is the ability of the management company appointed to run the hotel.

You will be relying on them running the hotel on your behalf.

I guess if you do your homework and can be satisfied that they will do a good job then why not......

tucbiscuit

lynzpower wrote: »

Well theres a free night in York on the cards, Id take that! DOesnt york have a pub for very day or something?

yeah that sounds good tbh, I'll tell my gf I've splashed out on an expensive night at a top hotel in York and tak her


and as paulos says I'll have to guage the managment team, not that have a lot of experience tbh