Everything You Should Know About UK Hotel Room Investments

Some investors enjoy being hands-on, while others prefer to put in the least work possible for maximum profit.

Hotel room investment has its origins in the US and works just like any normal buy-to-let investment – except the investor buys a room to let out to the hotel’s guests. If the hotel is popular, then the investors can expect a constant stream of guests, which will more than cover the costs of ownership.

Hotel room investment has exploded onto the UK buy-to-let scene in recent years and offers a good way to get the best of both worlds: high yields and low cash investments, compared to the housing sector.

The concept of investing in hotel rooms is not new; investors are increasingly recognising the benefits of investing in the commercial sector where yields can be more than double those in residential property. 

The added benefit is that void periods are few and far between, and the properties come fully managed, which removes the hassles of dealing with tenants or chasing rents. 

The yields generated from hotel room investments are, on average, higher than traditional buy-to-let investments. Gross net yields of 10% per annum are achievable compared to average gross yields of 5% from average UK buy-to-let properties.

Hotel room investments are varied and it is important not to believe everything the brochures tell you when considering an investment. Remember to research the locality and the demand for rooms in the area.

If the hotel is in a remote location, or has a history of changing hands frequently, ask why this is the case – and take care in assessing occupancy in the area. Just because you might think the setting is great, demand may not be there all year round.

We have several hotel investment opportunities available here, please feel free to have a look. Should you have further questions – get in touch with us today.