Hotel room investment is not a new concept, but it has become more accessible to the average person. This type of investment is more sophisticated than it was in the past and offers you a range of returns that make it particularly inviting. If you are looking for an investment opportunity, you should consider what the returns are of investing in hotel rooms.
One of the returns on your hotel room investment is the fact that you can use the room that you own. When you make this investment, you will be guaranteed a set number of days each year when you can use the room. You might be charged a small fee for the time you spend there, but other than this it will be free.
It is important to note that most investment deals will allow you to lower the days per year that you get. When you exchange the days, you will increase get a portion of the income that the hotel makes from renting the room to other paying guests.
The return that most investors are looking for is the shared income. As the name suggests, this return will provide you with a monetary return for your investment. The hotel will rent out the room that you invest in and split the profits with you.
When you choose this return, you need to carefully read the terms. There are many times when the profits of all rooms will be pooled together and then shared equally among all the investors. This is like how a company will pay dividends on shares. It also ensures that no on hotel room will generate more profit than another making all investments appealing.
A Guaranteed Income
When you choose this type of return, you will be getting a fixed and known income from the investment. The hotel management team will be incentivized to get your room let to ensure that they generate a profit that is in excess of what you earn. This is a very stable return n your investment and will be high-yield for a fixed period.
As you are going to be getting a guaranteed income from your investment, you will generally not get shared profits. The terms of your investment will state this, and the hotel management team will retain the other profits generated from the room rental.
Guaranteed Capital Growth
There are some hotels that will offer guaranteed returns on capital invested with them. When you enter this investment, you will purchase a room and be provided with a fixed price to sell it back to the hotel at a later set date. This type of investment will often be combined with a guaranteed income investment.
The benefit of this return for investors is that you have certainty of your capital return and growth. The hotel management team will benefit as it gets an injection of capital. This will allow them to expand their business at a faster rate and ensure that they are able to stay in business for longer.