As the property market is showing signs of recovery, we are suddenly becoming more confident in our ability to invest in property, and with this comes an interest in branching out into pastures new. The idea of investing in a hotel room might seem a little out there for lots of investors used to purchasing more standard properties for their portfolios, but a hotel room property investment could, in fact, be the perfect addition to yours.
Firstly, it adds diversity. Not many people consider investing in hotel rooms when they’re planning their property investment, and it will make your profile stand out. The real pioneers of the industry have been cottoning on to the fact that the tourism industry has remained fairly resilient in spite of the global recession, and it is a good time to think about investing in a hotel room if you’re looking for a relatively low risk way to enter the commercial property market.
There are various types of hotel room you might want to invest in. Hotel room investments generally work best with high end, luxury accommodation, and you will be investing in something like an executive room or a full suite. This will be branded for your company, and will almost always be one of the best rooms in a hotel, so you can expect good returns on your investment. These can be located all around the world, so can also help you get started in a foreign market.
However, if you want to go for something a little more familiar, it is also possible to invest in rooms in UK hotels. Country hotels and London suites are particularly popular for this purpose, and the strong luxury accommodation market in London means that it’s a good option for anyone based in the UK who wants to start off by investing in a commercial property market they are familiar with. There is also a clear exit strategy in place with this type of property, which appeals to many investors.
It can be very easy to get stuck in the cycle of buy-to-let properties or simply developing properties for immediate resale, and while you may be good at this, it can be far more rewarding to venture into a new type of investment entirely. It also looks impressive to be able to work with a diverse range of properties, and with opportunities such as these posing such a high likelihood of good returns, this is a fail-safe option for many investors.
Francis Peters is an investment portfolio management consultant with over 18 years experience in the industry.