Buying hotel rooms?

twanda

I see UK hotel rooms being offered for sale on daft.ie --- this is a new one to me??!!
Is this happening in Ireland too?

The below is taken from one such advertisement --

The concept of buying a hotel room is as an investment is a new one but has proved to be very popular in the U.K. over the last couple of years, basically instead of purchasing a property and then renting it out yourself, you would look to purchase a fully furnished Hotel room and you then benefit from the income from the room you have bought. The Hotel guarantee your rental return for the first two years of 15% per year, then you go into a 50% share of the net room income. The hotel's have been operating for two years now and are achieving great returns for the existing room owners. You are also entitled to 52 days a year personal usage for you and your family and friends to enjoy.

"You can literally, make money while you sleep"

Victor

Similar things do happen, here it has typically been for tax purposes.

I'm not sure if you actually get to own room 207 - I imagine you buy a share in a company.

athtrasna

I've seen it advertised here, think it was a hotel in Dun Laoghaire, probably in 2007.

Eglinton

They're advertising residences to rent in the Four Seasons Hotel in Dublin at the moment for €8000 per month :eek:

SkepticOne

The Hotel guarantee your rental return for the first two years of 15% per year, then you go into a 50% share of the net room income. The hotel's have been operating for two years now and are achieving great returns for the existing room owners.

So the existing owners are getting great returns but since they are still in the two year guaranteed period they are still getting the 15%. We've no idea what the actual returns would be like once the two year period is up. That 15% over the two years that you get back could easily be built into the price that you pay initially. They just feed it back to you over the period. From the way they have misleadingly worded the ad, I would stay away.

jackal

Forgive the skeptic in me, but if there were such "great returns" to be gained from this "popular" scheme, you would almost think that the guys running the hotel - i.e. the hotel - would want to keep 100% of the profit. What happens if the hotel closes? You are left with a studio apartment with no facilities other than sleeping available. Terrible idea in my opinion. I wonder if any of these schemes will still be "popular" after the two years guaranteed rental* elapse and we find ourselves in a once in a century recession?

* the hallmark of all bad investments - universally built into the initial "paddy" price.

Victor

Oh, do realise that hotels are doing as bad, if not worse, as property at the moment - quite a few hotels have closed over the last year.

jackal

Another wee thought. You buy room 501. If the hotel is half empty, the operator of the hotel has the choice to put guests in room 501 which he will only get 50% of the profits from, or room 502, which he will get all of the profits from.