Are you thinking about investing in the hotel industry? Well, rather than buying a whole hotel, you can actually invest in a single hotel room. Here, you can purchase a hotel room in any new and upcoming hotel development and collect a percentage of the total income generated from renting out the room. Here’s what you need to know about owning a hotel room and how to do it right.
1. Type Of Asset
You need to know the type of asset you want and aim high. You can actually get a steady income from owning midscale hotel rooms. However, you should expect some economic downturns. You can’t say the same about luxury hotels because the revenue remains the same throughout the year. Therefore, it’s much better to get a secure investment in a luxury hotel than those below them.
You need to know how much you can actually afford to invest when buying a hotel room. You should expect to pay as much as €15,000 to invest in a single hotel rooms. Therefore, you don’t need to dig yourself into further debt by getting a mortgage or loans. Check your savings to consider whether or not this is a worthwhile investment for you.
3. Taxes Applicable
You should know that there are taxes applicable in such an investment. Therefore, find a tax accountant to help you prepare for this accordingly. That way, you can avoid any surprises with the law when you fail to pay your taxes at the right time. Of course, you need to know your tax deductibles you can also get a good return on investment.
4. Exit Plan
Always have an exit plan ready. Here, you can choose a buy-back option which is guaranteed as long as your hotel room investment passes a pre-determined period of time. That way, you can sell your hotel room at a profit and get a good value for it.
Invest in a hotel room with these tips for the best results.