Top UK hotel investments are continuing to attract the interest of investors from a wide variety of backgrounds and with varying appetites for risk. In fact hotel investments are increasingly popular with investors who are curious about the potential returns that are possible through property investment but may not wish to initially commit a large amount of capital while they test the waters. The top UK hotel investments allow these first time investors to experience the rewards of real estate investment without many of the risks that are involved in investing in other types if property.
The low risk nature of the investment is attractive, as is the fact that it is possible to invest in a single room in a hotel – significantly reducing the barrier to entry of this type of of property investment. The track record of hotel investment would suggest that this type of property investment represents an extremely low risk option – investors are about as close to guaranteed a return as it is possible to be. The returns are attractive as well. Recent real estate surveys have indicated that the average return that a hotel property investor can expect is between 125% and 150% (on the price of their acquisition).
Adding to the attraction of hotel investing – especially for those who are new to property investment is the fact that there is usually a guaranteed buy back clause in the purchase agreement. In effect this means that the hotel management company will buy back the investment for a set amount after a specified number of years – in most cases this period is 5 years.
Hotel property investment is made even more attractive for the novice (or busy) investor due to the fact that it is in essence an investment which requires almost no input form the investor. Every aspect of property management is the responsibility of the the hotel management company via the hotel operators themselves. These parties will manage the property, market the rooms, maintain and service the property, ensure that bookings are handled efficiently and collect occupancy fees. Once all that has been done the investor will be paid – it really is that simple. Contracts this to the levels of involvement that are required for other property investments – even if the services of a managing agent are enlisted.
Of course there are numerous types of hotels – each serving different consumer segments that offer investment opportunities. Perhaps the safest and most attractive of these hotels fall into the ‘luxury’ segment. As far as investment attractiveness is concerned the boutique and niche lifestyle hotels are also beginning to attract a lot of investor interest. One of the reasons for this growing interest in ‘lifestyle’ hotels is the fact that research indicates that these are the sorts of hotels that are most attractive to millennials – a growing market segment with increasing amounts of disposable income.
If you are interested in exploring the potential of property investment then hotel investment is probably a logical first step to finding out just why UK property continues to fascinate investors from across the globe.