The hotel industry in the United Kingdom is absolutely booming. The current hotel industry is expected to grow by about 3.8% every year until 2025. This is because more people are visiting the UK and they all need a place to stay. As a result, this is a huge opportunity for investors who are interested in buying hotel rooms. These rooms typically start at £50,000 which is quite affordable when compared to the cost of other types of real estate. With that said, we will now look at a couple details if you’re considering investing in hotel rooms.
When you purchase a hotel room, the room actually belongs to you and this will be registered in the Land Registry. You will earn money by leasing the room to the hotel and you will earn income when the hotel books to room to visitors. As a result, you will actually get returns on your investment on a monthly basis. If you wanted to, you can even stay at your room in the hotel.
The great thing about hotel room investments is that they are extremely hands off. You don’t need to do anything once you’ve purchased it since there will already be people in place to make the bookings, deal with marketing, customer service etc. However, it is highly recommended that you only buy hotel rooms in hotels that are already operating and are in a popular area. This will ensure that your room is booked out regularly and you earn a steady income.
You should aim to buy rooms in hotels that have been operating for at least 3 years. Also, you should make sure that the hotel is not only making money from the rooms but also by running a restaurant, offering wedding venue services etc. It is best to select a hotel that is being run by a well known and established hotel management company since this will provide a higher level of comfort that the hotel will continue to be run profitably and that it has the lowest chances of going out of business. You should also be aware that your investment would be completely passive and you won’t typically have a say in how the hotel is run.
To wrap things up, UK hotel room investment is a fantastic idea especially if you’re a new property investor or if you have low capital to work with. However, make sure you do your due diligence so that you buy a hotel room that will definitely provide an excellent ROI.