Hotel Room Resale Market

Once a hotel is operating and a proven income stream can be shown, then the investor can take advantage of the resale market for such rooms. As with other investment asset classes, Assetz offers a resale service for investors wishing to resell their investments.

The room would be valued on a commercial basis according to the level of rental income, quality of operator and the hotel brand. It is reasonable to assume that, if rental income achieved rises 10%, then the room value will rise by a similar amount as it is typically the yield % that the new investor is seeking.

Buying a hotel room off-plan and taking advantage of the early years’ greater than average increasing rental income, has been shown to be profitable on previous hotels when investors seek an exit after the first few years of the hotel being established.

For example, with GuestInvest, the original Central London buy-to-let hotel room operator, over 30% of all rooms sold in the original hotels have been resold to date, and sales have been achieved within weeks of being put on the market. GuestInvest have recently reported that their clients’ hotel room investments are currently achieving 8.13% yield (compared to initial net yields of 6% being offered, reflecting the significant growth in rental income during the initial operating period) and that the rooms have achieved 8.03% average growth per annum.

 

 

Online Articles on Hotel Room Investment

Newspaper articles on this booming sector

• A room with a view to a profit - Guardian
• After London, buy-to-let hotel rooms go nationwide - Telegraph
• Buy-to-letters check in to room service - Telegraph
• Bed and benefits - Investors Chronicle
• Axa SIPP allows investors to buy hotel rooms - IFAOnline
• Hotel room bug bites Aegon sipp - IFAOnline

Hotel Rooms in Pensions/SIPPs

Hotel Rooms As A Pension Investment

Hotel rooms are classed as commercial assets and are one of the very few property types allowed to be purchased directly by a pension/SIPP. Investors can purchase a room through a Self Invested Personal Pension (SIPP) either individually or in a group and take advantage of the tax relief available upon the income and capital growth. A pension investment could receive up to 66% income tax ‘top-up’ (for a 40% tax payer) on their contibution, as a tax refund from HMRC. Read More on Hotel Room Finance