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A hotel room investment can give you a regular passive income together with an exit strategy that can deliver a lump sum profit when you decide to sell up. As an investor you can enjoy the regular, passive rental income along with the lump-sum profit on exit without having to do any work at all – these are truly hands-free investments! As the investor, all you need to do is write the cheque and then sit back and collect your assured returns as everything is fully-managed on your behalf.
This article will consider the basics of a hotel room investment, the advantages that come with such a specialist investment. With a low entry price, regular income, the readily available advice in the market place and research at your fingertips, the risk is low. We will also go over how to mitigate common risks that come with investment in hotel rooms to give you an all-around guide to the hotel investment sector and how it can make you more money on your investments.
Why Investors Are Turning To Hotel Room Investments For Greater Returns & Assured Exit Strategy
A hotel room investment is a great way to turn your savings into a steady income and increase the health of your finances through serviced and fully-managed property whilst retaining and even growing your original lump sum. These investment opportunities make great investments because they can give you an average yield of around 10% each year. If you invest £50,000 into this type of investment, you can expect to receive an annual income of £5,000 from the rental returns which are £600 each month!
Compared to other forms of investment such as an FTSE 100 company shares portfolio (4%), cash deposit accounts (1%) and 10-year gilts (0.95%) these investments offers a much better return than any asset class outside of property investment at this time.
Returns Compared With Other Investments
In terms of high annual yield, a hotel room can give you great returns on your savings compared to other assets.
In comparison to other types of property investment, when you invest in a hotel it will offer higher returns despite the lower entry requirement. With a regular buy-to-let investment, depending on the area, the NET yields will only be around 7% or less in 2019, and generally the further down south you go the lower the yields due to expensive overheads. This brings us to another advantage of hotel room investment – there are no ongoing or hidden costs – once you have purchased the unit you will not be asked to make any further payments and the assured returns are NET returns which means that no deductions will be made from this income.