Hotel room investment

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sixpence.
sixpence. Posts: 295 Forumite
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in Savings & investments
Anyone thought of doing this? Would be pretty cool to own a London hotel room, but I'm not sure if it's a sound investment or what the service charge is.

https://www.zoopla.co.uk/new-homes/details/51498239?search_identifier=d1086861903fd702d21d09d3a7a0e514
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  • Chino
    Chino Posts: 2,029 Forumite
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    When the Zoopla listing you linked to even admits that "All pictures shown are for illustration purposes only", you've only got to wonder about the extent to which Zoopla is trying to scam you, particularly when Zoopla claims that "Investing in a hotel room tends to be one of the lowest risk investments and an excellent option to diversify and Brexit proof an existing portfolio, especially when it is UK based.".

    Just walk away.
  • dunstonh
    dunstonh Posts: 116,371 Forumite
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    Anyone thought of doing this?

    God no.......
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • redux
    redux Posts: 22,976 Forumite
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    Why?

    Would you lend me money for the range of tools and faciliries I use for my job, without knowing enough about it? Of course not.

    Interest rates have been at historic lows for years. Let these businesses get their gearing by borrowing money from the banks, and keep more of their own profit, or if not why not.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    sixpence. wrote: »
    Anyone thought of doing this? Would be pretty cool to own a London hotel room, but I'm not sure if it's a sound investment or what the service charge is.


    If you are looking for an investment opportunity where you can lose all your money with no redress, and no way to exit early on when it becomes clear its circling the bowl and about to head downwards into the sewers, this type of "investment" would definitely be one to strongly consider.
  • dividendhero
    dividendhero Posts: 2,417 Forumite
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    sixpence. wrote: »
    Anyone thought of doing this?

    For about a micro-second.

    Think about it, a hotel owns every other room except the one owned by you - which one do you think they'll book to guests first :wall:
  • rr755507
    rr755507 Posts: 119 Forumite
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    edited 24 May 2019 at 8:38AM
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    It's a cracking deal for the Hotel. Sell off an underutilized hotel room for a vastly inflated sum, and then receive guaranteed service/management fees from the [STRIKE]victim[/STRIKE] buyer
  • DrSyn
    DrSyn Posts: 889 Forumite
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    1. First thought on looking at the advertisement was,

    "If it is going to provide such a return,why are they letting anyone else in on the deal, whats in it for them?" One explanation is provided by Post 7.


    2. Its Leasehold, something I have never liked.


    3. Reminds me of similar things I have read of, where they buyer always seems to end up a making loss.

    So the short answer is NO!
  • lisyloo
    lisyloo Posts: 29,615 Forumite
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    I wouldn’t touch it with a barge pole.

    Firstly there will be no redress if something goes wrong so you can lose all your money. As such this is a great tactic for scammers as you have no redress.

    Secondly even if it did work you’re not managing it, so there’s scope for it not to be managed well.

    If you think property is good (and in general we don’t) then buy your own and that way you’re in control and no one is scamming you.
  • jonnygee2
    jonnygee2 Posts: 2,086 Forumite
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    If it underperforms and returns a negative yield you are royally screwed.

    The hotel will have no reason to reduce the rent or service charge and no one is going to buy it off you because the value of something that can only be rented and has a negative yield is basically zero.

    At least with a buy to let it has a resale value as a property, whatever its performance on the rental market.
  • dealer_wins
    dealer_wins Posts: 7,334 Forumite
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    Extreme risk of losing every penny.

    If you want to "invest" in hotel rooms, maybe consider buying shares in one or more of the big hotel companies.
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