Hotel room investment strategy
Property investment opportunities could be the answer to the huge cost of a university education today. Specifically, an investment in hotel rooms. Most parents dream of their children going to university. Then they struggle with the costs. Investing in a hotel room could provide the funds to not only cover tuition fees but provide a gradation windfall that will change your child’s future.
University fees are exploding
The cost of going to university is exploding. Not only are tuition fees rising, but so too are living expenses. If you don’t plan for this cost, your child will come out the other end with a degree and a huge debt. It’s been calculated that the average cost of getting a higher education will be £74,307 in 2033.
A friend of mine has two children. When the first was born he and his wife started saving for their child’s education. A second child came along five years later. My friend and his wife continued to save as they had been. Now the first child is nearing the time that he will be starting university.
My friend has been pondering how to best fund the university fees of both children. He’s decided on a property investment into hotel rooms. This investment will secure an income to pay the fees while protecting the capital. Plus, he’ll have a sizeable windfall to give his son. When his daughter goes to university, he’ll simply repeat the investment. Both children will be treated the same, and he’ll have his capital to invest for income or growth after his children have flown the nest. (Between you and me, he’s planning a big holiday to celebrate.)
A property investment that’s hassle free
My friend is one of the busiest people I know. He’s just got to the stage where his career is about to take off. One of the things that appeal most about hotel room investment to busy people is its simplicity and ‘hands-off’ style.
He had considered putting his cash into bonds or a cash ISA. Neither pays enough – he’d quickly deplete his funds. He also considered an investment into residential property, but he considered it to be too time-consuming. A stock market fund might have produced the growth and income he wants, but after eight years of rising markets, he’s fearful of a collapse in share prices destroying his funds.
Then I spoke to him about hotel room investment. With PwC predicting continued growth in hotel room occupancy, he likes the outlook for the sector. And Brexit could encourage more people to holiday in the UK – both from the UK and overseas. Best of all, hotel room investment is hassle free – you buy a hotel room and let the management work its magic on the business side. The key here is to invest in a hotel whose management has the experience and expertise needed to take advantage of the growth in hotel occupancy rates.
Having made your investment, you sit back and benefit from guaranteed income and capital growth over the investment period.
How much can you earn from a hotel room investment?
Income and growth rates vary but are typically around 8% per annum income with a capital growth of 15% over five years. It’s a fixed income investment, but instead of being an investment in a piece of paper it’s a tangible property investment opportunity.
The hotel can offer the income it does because it’s already a going concern, with existing revenues and profits. The guaranteed capital growth is a conservative upside based on business plans, previous experience, and market outlook.
How can hotel room investment be used to pay university fees?
My friend has saved a little more than £110,000 in ISAs during the last 18 years. He’s decided to withdraw that money and invest in a hotel room because he can’t get the guaranteed income and capital growth he desires from the ISA.
His £110,000 investment in hotel rooms will provide an income of £8,800 per year. That’s just about enough to pay his son’s university tuition fees and make sure he doesn’t have a huge debt hanging over him when he graduates. He’s going to take the £16,500 guaranteed capital gain and buy his son a car – should he graduate, of course.
Then he’ll simply rinse and repeat to do the same for his daughter.
After both his children have graduated, he’ll have done something that very few parents can: paid for two children’s education, bought both a new car and have his original capital intact to provide a better lifestyle for him and his wife.
I tell you, there are some people out there with their heads screwed on!
Contact one of our team today on +44 (0)207 923 6100, and discover how a hotel room investment strategy could make your financial objectives a reality.
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