Invest in a Hotel Room, Rather Than House


Bangalore: The ripples of the tricky economic downturn have been felt in almost all the sectors from food to fuel, auto sector and the real estate. The value of real estate properties, houses, buildings, even vacant land is going up each and every day. Over the past few years, prices for houses have skyrocketed in many areas of the country. Investors disappointed with residential property are switching to hotels. Although it's one of the strangest forms of property investment, it is slowly gaining momentum in India. The power to buy ownership stakes in hotel rooms has been around for years. Off lately it has become a popular way to finance new construction and this creates investment opportunities. Most of the buyers find this sort of an investment appealing is because the initial capital spent is reasonable as you can invest early in yet to be built hotels. In addition to being able to stay in their rooms whenever they want, buyers can make money by leasing out the units to others. Before investing, the investor should know that a hotel has one owner, either individual or corporate, but a condo hotel is sold off unit by unit. The best deals can be found prior to the beginning of construction and in the very early stages of construction. After this phase, the cost of ownership increases dramatically. In India, some local players like Hydragroupindia, Asha's Papilon Holiday Cottage, Mohili Meadows, part of Cinnamon Holidays are exploring the condo hotel concept. Imagine investing in a hotel that is on the beach side, you not receive 50 percent of the income but also enjoy the facility of staying in those rooms if you desire to on a family vacation. But the owner's usage has some limits. Some of the benefits the investor receives on investing in hotel rooms are hassle free possession, an incredible holiday home available for use whenever they want, a big asset in your portfolio. There are a variety of expenses involved in a hotel. Some of these fees are paid by the owner and others are paid by the operator of the hotel. The owner pays all the taxes and insurance on the unit. If you plan to invest in business hotels, look out for well known brands that have access to national and international market thereby increasing your profit.