Neighbourhood Watch: The Baltic Triangle, Liverpool

Neighbourhood Watch: The Baltic Triangle, Liverpool

The Baltic Triangle, Liverpool Once a derelict area of warehouses and factories, The Baltic Triangle has evolved into a Creative & Digital hub of Liverpool. Voted “the coolest place to live in the UK”, the trendiest area in Liverpool is a hotspot area for creative entrepreneurs thriving with innovation and excitement from day to night.

Neighbourhood Watch: The Baltic Triangle, Liverpool

The Baltic Triangle, Liverpool

Once a derelict area of warehouses and factories, The Baltic Triangle has evolved into a Creative & Digital hub of Liverpool. Voted “the coolest place to live in the UK”, the trendiest area in Liverpool is a hotspot area for creative entrepreneurs thriving with innovation and excitement from day to night.

Retail

Lost Art

Home to the independent market of the self-established creative quarter, Baltic Triangle is home to an array of up and coming creative talent. Lost Art, a skateboarding shop with a strong sense of community offers a fantastic knowledge of the sport and attire for those who wish to dress like one.

Red Brick Vintage

Additionally, in Cains Brewery Village, Red Brick Vintage is a journey to the past via an assortment of vintage clothes, furniture and art. A short stroll is Red Brick Hangar, the North West’s answer to London’s Camden Market. Offering independent stalls and businesses from boutique designers to tattooists, the creative energy flowing through the market is almost infectious with innovation.

Cuisine

The Baltic Social

While Baltic Triangle was once associated with its factories dating back to the 19th century, the regenerated area is now home to trendy bars, cool independent shops and stylish eateries.

A city favourite is The Baltic Social. An icon for socialising renowned for the high-quality craft beer, food and live music, the punk-infused venue is described a hipster’s homeland. The delicious dishes including chickpea fritters and sweet potato sticks wrapped in smoked bacon make the perfect meal for the various music events The Baltic Social hosts throughout the year.

Camp and Furnace

The superstar factor of the Baltic Triangle is the Camp and Furnace. Ranking Number 2 in The Times’ 20 Coolest Restaurants in Britain, Camp and Furnace is an old industrial space transformed into one of Liverpool’s most thriving independent venues. Offering log fires, vintage caravans, bare bulbs, lobster and street food, it’s a fantastic place to eat, enjoy sport or a night on the town.

Transport

Citybike Liverpool

Baltic Triangle’s popularity has led Liverpool council to expand the public transport infrastructure. In 2018, Liverpool opened the 100th city bike docking station within the Titanic Hotel’s car park in the World Heritage listed Stanley Dock. Additionally, the CityLink bus service stop throughout the area.

Tourism

Image: Threshold Festival (hyperlinked: https://thresholdfestival.co.uk/)

Threshold Festival

Voted as one of the top European cities, Liverpool boasts a high amount of tourism for its thriving cultural scenes thanks to The Beatles, The Tate Modern and Liverpool Football Club.  Now one of the most cutting-edge places in the UK, millions are flocking to Baltic Triangle to experience events including Homotopia, Threshold Festival and Sound City In preparation for the ever rising position the neighbourhood has, Epic Hotel will be arriving in 2020 to accommodate the rising numbers of tourism.

Final Note

The Baltic Triangle is a historic area that is the regeneration hotspot of Liverpool. With new life being breathed into the neighbourhood, Baltic Triangle is being dubbed ‘Liverpool’s answer to New York’s Meat-Packing District’. With over 50% of Liverpool’s population are young professionals drawn for the lifestyle of the Baltic Triangle. In the centre of the Northern Powerhouse Initiative, now is the time to invest in Liverpool’s thriving district for residential and commercial property.

Ready to see Liverpool properties? Email us at info@tarquinjones.com for more details.

 

 

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Ethical Property: THE FUTURE OF INVESTMENT

Ethical Property: THE FUTURE OF INVESTMENT

Why Invest in Ethical Property? In the world of investment, property is the safest route to net returns. After all, as long as people need accommodation, property will always be in demand be it commercial, student or residential. We’ve entered a new era of property investment, where financial return is not the only concern but

Ethical Property: THE FUTURE OF INVESTMENT

Why Invest in Ethical Property?

In the world of investment, property is the safest route to net returns. After all, as long as people need accommodation, property will always be in demand be it commercial, student or residential. We’ve entered a new era of property investment, where financial return is not the only concern but also how the property can service a community.

An ageing population

Danygraig Care Home, Wales

As scientific discoveries have revolutionised medicine, the 2019 life expectancy in the UK is 80.99 years while in 1969 the life expectancy was 71.72 years. The UK celebrates over 10 million aged 65 and older, outnumbering those aged 16 and under with the baby boomer generation (1946-1964) reaching retirement age, the demand for residential and nursing homes is at high demand. Currently, 400,000 people are living in care homes, and over 800,000 people living with Dementia. By 2021, this will rise to 1 million, and be more than double by 2050.

They’re currently 400,000 people living in care homes, and due to the over 85-year-old demographic being the fastest growing age group, predicted to grow by 106% to over 2.6 million by 2030.

Bryn Illtyd Residential Home, Wales

With the mortality rate in the UK, dramatically rising, there is a dramatic increase in demand for specialist dementia and nursing care. The care home market will play a significant role in our future society, with increasing demand for quality accommodation, care and funding.

The combined market value for older people in the UK is currently estimated to be worth £22.2 billion, of which £13.4 billion is attributable to residential care. As the number of elderly people with high care needs in the UK is expected to increase over the next 20 years, the need for modern, fit for purpose care homes is increasing rapidly.

The Millennial Effect

The Bridge, Kirkcaldy

Over 62% of millennials have considered starting their own business, with 72% feeling that start-ups and entrepreneurs are a necessary economic force for creating jobs and driving innovation. According to the 2016 BNP Paribas Global Entrepreneur Report, millennials are starting businesses at younger ages than their counterparts in previous generations. Baby boomers, for example, tended to launch their first business at an average of 35 years of age. Millennials, on the other hand, start their first business around age 27, implying they’re more eager to start businesses and possibly, are more willing to take risks in doing so. The report also shows that millennials have launched about twice as many businesses as their baby boomer counterparts have

The millennial leaders demand action on major issues including climate change, mental illness and work life balance. Commercial property is seeing their influence and meeting their perquisites outdoor spaces, remote working capabilities and multipurpose spaces.

Autism and the UK

In 2019, there are approximately 700,000 autistic people in UK, more than 1 in 100. Including their families, autism is a part of daily life for 2.8 million people. Many autistic children in state schools find difficulty in their needs being catered to, to the extent that 63% of children on the autism spectrum are not in the kind of school their parents believe would best support them. Additionally, 17% of autistic children have been suspended from school; 48% of these had been suspended three or more times; 4% had been expelled from one or more schools.

St Camillus No7, Blackpool

As autism is a lifelong disability that cannot be seen, the need for support to cope with finding employment and surviving daily life is vital.  Only 16% of autistic adults in the UK are in full-time paid employment and only 32% are in some kind of paid work.

To adhere to this, John Lewis has launched autism-friendly shoe services and The Education Authority now spends £270m a year on supporting children with special educational needs – including autism.

Final Note

With the rise of ethical factors being pushed for the forefront, the property market must represent the world we live in, both financially and medically.

 

 

 

 

 

 

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The rise of the DINK

The rise of the DINK

In 2019, there are more child free adults than ever before. While, for those born in 1946, only 9% had no children at the age of 45, whereas for women born in 1970, this figure has risen to 17%. A US study discovered that 1 in 5 women enter menopause without children. Additionally, birth rates

The rise of the DINK

In 2019, there are more child free adults than ever before. While, for those born in 1946, only 9% had no children at the age of 45, whereas for women born in 1970, this figure has risen to 17%. A US study discovered that 1 in 5 women enter menopause without children. Additionally, birth rates among women in their twenties declined by 15% between 2007 and 2012.

The reasons why so many couples adopt a Dual Income, No Kids lifestyle, commonly known as DINK, is varied. For some the financial burden of raising a child is more trouble than its deemed worth and for others, it means sacrifices to lifestyle and career aspirations. Without the responsibility of children to cater to, the rise of DINK, the demands for property are not what they were for young professionals of Baby Boomers and Generation X.

What DINK mean for the property market?

Imperial Square, Luton

ONS figures showed that in 2017 the proportion of women never having children has doubled in generation.

Leisure & Amenity

Infinity Towers, Liverpool

Young professionals today are interested the trendy new neighbourhoods. Without the pressure to consider a property’s proximity to schools and day-care the focus for many tenants now is convenience. After working all day, and in some instances earning from a second job, the Millennial generation are interested in homes which offer closeness to shops and travel links.

Work Life Balance

The Tannery, London

In 2019, the UK is more career driven than ever before. A booming economy mixed with the impending launch of HS2 and mass regeneration schemes, means over 250,000 jobs are being launched in the UK by 2030. As a result of this, generation rent is drawn to city centre properties to stay in the heart of their working life.

Student Housing Demand

Marvel House, Plymouth

In 2018, 2.3 million students were recorded to be in higher education. Entrepreneur reported that 24% intend for pay for higher education via savings and 38% plan to work during their university studies. Higher education is at an all time high since the launch of the postgraduate government student loan. As more students stay in education for longer to gain qualifications such as an MBA and PhD, often via part-time study, instead of starting families the demand for student housing will increase.

Luxury Lifestyles

Hadrian’s Tower, Newcastle

Without adhering to the practicalities of raising children, tenants are desiring homes to suit their personalities and lifestyles. For example, 2019 saw an increase in properties with pools and audio door entry systems. Favouring state-of-the-art design specifications including private lounges, the demand for luxury property is increasing across the country.

Travel Pursuits

Epic Hotel, Liverpool

A chief reason, many adopt a DINK lifestyle is the sizeable disposable income, which can be used for travel. The rise of the staycation, has seen a dramatic increase in domestic holidays. As cities within the Northern Powerhouse gain regeneration, the rise in UK’s tourism to serene areas will benefit from the child-free movement.

Entrepreneurship

The Bridge, Kirkcaldy

Among Generation Z, working to suit your lifestyle is a priority. Entrepreneur announced 41% of Generation Z intend to start their own businesses instead of continuing the Millennial trend of side jobs. The rise is e-learning opportunities focusing on creative arts and business is predicted to be worth four times more than the higher education market. As a result of this, the demand for office space will increase.

Old Age

Bryn Illtyd Ltd, Wales

Without the comfort of having children to take care of them in old age, DINK jetsetters will be desiring Care Homes in the future.

Final Note

As the economic climate changes, the demands for property respectively alters. With more favouring an enjoyable lifestyle and the financial benefits that come along, the demand for family friendly property has seen a sharp reduction.

 

 

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The Rise of the Staycation

The Rise of the Staycation

Long Live the British Holiday Ayia Napa or Robin Hood’s Bay this summer? As the temperatures rise in the run-up to summer’s arrival, the annual summer holiday planning for many a Brit is taking place. The regular beach destinations including Mykonos (Greece), Lanzarote (Canary Islands), Menorca (Spain) and Algarve (Portugal) have long been favoured for

The Rise of the Staycation

Long Live the British Holiday

Ayia Napa or Robin Hood’s Bay this summer?

staycation, aiya napa, domestic tourism, summer holiday, destination holiday,

Aiya Napa

As the temperatures rise in the run-up to summer’s arrival, the annual summer holiday planning for many a Brit is taking place. The regular beach destinations including Mykonos (Greece), Lanzarote (Canary Islands), Menorca (Spain) and Algarve (Portugal) have long been favoured for their serene ambience, cultural atmosphere and performance as an escape from the grind of daily life. The beauty of Cornwall’s Talland Bay and Wales’  Llanddwyn Island, has worn away the allure of Europe, in favour of a staycation. At the same time, those of us who prefer skiing on Christmas Eve, to relaxing at home, are trading La Plagne and Livigno for Glenshee and Manchester. Data from the Great British Staycation, revealed that in 2018, 52% of 25-34-year olds took holidays within the UK for tourist attractions and financial benefits.

Robin's Hood Bay, staycation, domestic tourism, hotel property,

Robin Hood’s Bay

With the looming presence of Brexit, the magnetism of British soil is leading many holiday goers to forfeit the passport stamps in favour of domestic tourism. With the decline of the pound’s value on the global market and the impending costs of VISAs to travel within Europe, the UK has become a holiday hotspot. Tourism and marketing expert Dr Sheila Malone of Lancaster University said there had been a noticeable movement in trends following the Brexit referendum. She told Sky News: “That seemed to trigger a different kind of consumer sentiment in terms of spending – a little bit more cautious, looking for a bit more security in how they (British holidaymakers) are spending their money.”

What does this mean for the tourism industry?

Trafford Hall Hotel, Old Trafford, Manchester, Hotel Property, Domestic Tourism,

Trafford Hall Hotel, Manchester

The increase in domestic travel over overseas trips, while initially was driven by the rising costs, has become a trend, holiday goers and travellers desiring multiple short breaks throughout a year, no necessity for travel insurance, last minute holidays and reasonably priced packages. Additionally, as the pound has weakened international tourism has increased, making the UK a hotspot travel destination both nationally and across the globe. Locations such as Manchester draw consumers from all walk of life including sport and theatre.

Hotel Property

The rise in staycations stands to benefit the UK tourism industry, expected to be worth £257 billion by 2025. The hotel industry reached a total turnover of £98bn in 2017 proves the demand for quality hotels in the UK is higher than ever before.

Epic Hotel, Hotel, Liverpool, Hotel Property, Domestic Property,

Epic Hotel, Liverpool

Most popular in London & Blackpool, Hotel Property is a smart method of property investment, given the lower entry cost compared to residential property and student property. It’s an ideal method to invest in the British economy and support an industry with rapid growth. As a hands-off management investment, the hotel property is a passive income and as most investment deals offer to buy back in year 5, it’s an intelligent short-term investment.

Interested in hotel properties? Email us at info@tarquinjones.com

 

 

 

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Why to consider investing in care home investment opportunities

Why to consider investing in care home investment opportunities

Here at Tarquin Jones, we don’t limit ourselves to purely residential Buy to Let investment opportunities. We take a look at various property sectors that fundamentally serve as sound investments for our clients. In today’s article, we will be going into the reasons why care home investment opportunities are proving a shrewd asset class for

Why to consider investing in care home investment opportunities

Here at Tarquin Jones, we don’t limit ourselves to purely residential Buy to Let investment opportunities. We take a look at various property sectors that fundamentally serve as sound investments for our clients.

In today’s article, we will be going into the reasons why care home investment opportunities are proving a shrewd asset class for many Buy to Let property investors.

Ageing UK population

Despite the fact care homes have been existent in the UK for many years now, care home investment is currently very much a growing trend since changing demographics over the last thirty years or so have led to a substantial increase in the percentage of the UK population, which is aged 65 and over.

At present this is almost a fifth of the total population and it is predicted to increase to around a quarter over the course of the next thirty years. We’re constantly told that the UK has an ageing population and it’s certainly true amongst a large percentage of the total demographic. In the simplest of terms, the laws of supply and demand very much favour this market sector.

The figures show that there are more and more older people seeking these care homes and with a relative shortage in terms of supply on these, prices are going up on those that are available.

Strain on public funded care

English councils are facing growing numbers of elderly and disabled people who require care, whilst facing a lack of funding to pay social care fees. To meet the growing need all but four councils in England are planning to increase council tax by the maximum allowed to help pay for social care.

The implementation of the National Living Wage6 in 2016, coupled with financial pressures on local authorities has put added strain on the care industry. Rises in providers’ costs and the squeeze on local councils’ budgets are leaving some care providers in an unsustainable position.

The combination of both privately and publicly-owned care home closures, and increasing numbers of people requiring social care, means there are big opportunities for well-run providers of care to expand the development and refurbishment of care facilities in areas of high demand.

In some ways better than residential or commercial?

Investing in care homes offers the best advantages of commercial property investment and residential property investment, while minimising the potential downsides of both.

Other types of commercial property such as retail or office space can be affected by the same sorts of issues as faced by residential landlords. These include vacant periods, unrecoverable rent and changes in circumstances which negatively affect the property, such as changes to the employment landscape or to transport links.

The nature of care homes is such that these issues are generally of little to no concern.  The simple fact of the matter is that the UK population has been growing older for three decades now and is set to keep on growing older for at least the next three decades.  Older people require homes which are suitable for their needs in the later stages of their life and care homes provide an effective way of catering for this significant demand.

Increased bank lending for the sector

Care home investments have seen a massive influx of investment support from a variety of lending institutions over recent years, and therefore are becoming an integral part of any investment portfolio. Banks and other lending institutions are becoming very eager to lend for UK care and nursing home investments, due to the long-term, robust and lower risk income streams that it offers.

They’re a far cry away from flipped residential property or student accommodation in terms of potential lending- care home opportunities are safe and assured to earn you a steady income. Banks and other lenders love this in a property and will more likely offer good financing as a result.

Highly regulated industry

Due to the highly sensitive and important nature of care, the health and social care sector is a highly-regulated industry. The Care Quality Commission (CQC) are the independent regulator responsible for monitoring, inspecting and regulating health and social care services in England.

Because of the CQC’s regular inspections, most care homes are kept to the highest standard in terms of living space and building quality, meaning that any investor buying a room in these can expect very little to go wrong from their perspective. It’s a completely hands-off investment sector that is left in the hands of the professionals both on-site and from the regulators.

For the private investor, now is an excellent time to consider investing in UK care. There are a growing number of innovative developers offering great buy to-let investment opportunities within the UK care sector.

With the tried and tested sales model, finding an ethical, sustainable investment that delivers stable returns and prospects for capital appreciation is no longer the preserve of large institutional investment, and is increasingly becoming an attractive option for individual investors thanks to the security of long leasebacks and long-term cash flows.

Care home opportunities provide the investor with the chance to invest in one of the UK’s most unique asset classes to obtain a regular rental income. Capital growth is not something which is typically expected of care home opportunities but with some of the unique deals that Tarquin Jones manages to source i.e. St. Camillus in Blackpool, buyback options provide that aspect of the investment as well as a solid income stream.

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Why to consider investing in Purpose Built Student Accommodation

Why to consider investing in Purpose Built Student Accommodation

For those first-time investors looking for a pure cash investment that delivers them a regular sustainable income, or a seasoned investor looking to diversify their existing property portfolios, Purpose Built Student Accommodation (PBSA) can provide such for any type of landlord. In today’s article, I will explain why to strongly consider investing in one of

Why to consider investing in Purpose Built Student Accommodation

For those first-time investors looking for a pure cash investment that delivers them a regular sustainable income, or a seasoned investor looking to diversify their existing property portfolios, Purpose Built Student Accommodation (PBSA) can provide such for any type of landlord.

In today’s article, I will explain why to strongly consider investing in one of the UK’s most reliable property sectors for income and just why that is the case.

What is Purpose Built Student Accommodation?

PBSA property functions in a similar fashion to your traditional residential Buy to Let’s with a couple of key differences:

  • The property is exclusively designed for students and isn’t built to house your typical residential tenant such as workers or families.
  • The building will have a slew of on-site, high quality amenities for all the students to use i.e. a gym, games room, manned reception desks etc.

The student building will naturally be in close proximity to a university, college or another educational institute. This will maximize your chances of finding a long-term tenant. It is the rise of PBSA which has resulted in student accommodation as a thriving asset class for the discerning investor.

Why is it popular from an investment point of view?

More young people than ever are attending university and it’s no longer considered something for the privileged elite. Student numbers have almost doubled in the UK since 1992- figures show that from the period March-May 1992 there was 984,000 people aged 18-24 in full time education. In May-July 2016, there was 1.87 million, approximately 1 in 3 people, aged 18-24 in full time education. Higher education is now commonplace, and this is all despite the rising tuition fees showing this is not considered a major deterrent among many looking to study in the UK.

With universities struggling to build enough properties every year to meet the demand that a growing influx of students brings, more are turning to the private sector in order to be housed for their academic studies. There is a current shortfall of 21,900 managed bed spaces in Liverpool’s student market- a pipeline exists of 6,892 but this still isn’t enough to meet the ever-growing demand.

Reliable source of income

The income student property produces is typically very good also. Rental yields can be as high as 10-11%, and many developers/managing companies offer rental guarantees that give you as the investor assured returns. With relatively low entry points into investment here in comparison to residential property, this means your return on investment pound for pound is very high in terms of your overall returns.

One of the main reasons why student accommodation is so sought after is the reliable nature of the income. Student numbers continue to rise each and every year in the UK, meaning that you will never be short of a potential tenant and will keep void periods to a minimum. If your goal as an investor is to secure a regular income, then student property is perfect for achieving that.

Student’s growing expectation on their accommodation

Over the years, there has been a paradigm change in the lifestyle of UK students. Many are now shunning the previously traditional low rent second hand HMO properties as they see the new build purpose-built accommodation with higher expectations than they had done before. Value for money is increasingly becoming considered in terms of accommodation.

Increase in tuition fees has created a new breed of modern students who see the burden of increased financial debt should result in value for money in terms of the accommodation services being offered. Many investors are taking note of this attitude change and this is a major, yet understated, reason why many are choosing to invest in student property.

Purpose Built Student Accommodation gives investors the chance to buy into a asset class that is ideal for those looking for sustainable income over a long-term period. It’s excellent for first time investors due to the low entry point of investment and great for residential property investors looking to diversify and add an income producing asset to their property portfolios.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

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Hotel room investments and why they’re attractive

Hotel room investments and why they’re attractive

Hotel room investments give Buy to Let investors the opportunity to invest in one of the UK’s best asset classes for property. I have spoken with many investors who initially shied away from investing in hotels because they were under the assumption that they were too expensive and mainly for highly wealthy investors. This is

Hotel room investments and why they’re attractive

Hotel room investments give Buy to Let investors the opportunity to invest in one of the UK’s best asset classes for property. I have spoken with many investors who initially shied away from investing in hotels because they were under the assumption that they were too expensive and mainly for highly wealthy investors. This is far from the case- investing in single rooms is actually a great entry point for many first time Buy to Let investors.

In today’s article, I will explain the idea of hotel room investments and why they’re considering so attractive from a BTL point of view.

What is a hotel room investment?

A hotel room investment gives any investor the chance to own a stake in a high yielding industry at a fraction of the cost of owning a hotel and taking a complete, hands-off approach in terms of running it. The management of your bought unit is handled on-site from advertising, letting out your room and catering to your short-term tenants’ wants and needs.

This will net you a regular income at the cost of a fee to the managing company to handle all this for you. Many feel it’s a small price to pay for them managing every single aspect of your property on a day-to-day basis.

Why are they so popular?

The demand for hotel rooms increases the more and more holidaymakers and tourists flood to popular UK cities and holiday destinations. Occupancy rates continue to rise and with demand so high, prices increase as well. This leads to hotel rooms being popular from both a tenant’s perspective and an investors viewpoint as well.

The demand for hotel rooms is consistent nationwide. In fact, though the 83% occupancy rates of London hotels are higher than the regions’ occupancy rates of 76%, the growth in yield per room produced by regional hotels is outstripping London. An investment in a hotel room now is an investment in a booming industry which is forecast to continue to grow.

Why they’re attractive

There are a variety of reasons why hotel room investments are considered great from an investment perspective:

  • Low entry cost in comparison to traditional residential apartments.
  • Completely hands-off investment. Perfect for the investor that has no time to manage their properties due to busy work/family life.
  • High yields from 8-12% NET
  • Guaranteed income- the managing company will, more often than not, offer a set yield for you over a period of time. This means you will be earning a regular income safe in the knowledge that you will be receiving your money regardless of whether your property is even let out.
  • Good way to diversify a residential portfolio at a lower cost

Where to buy a hotel room

Location is key when considering a hotel room investment. This can be said for residential investments as well, but it takes on extra importance with hotels as they are short-term stays in nature and need to be located where tourism is high. Take a look in either major UK city centres or popular holiday resorts to give yourself the best possible chance of securing sustainable returns.

It is vitally important to also make sure the managing company is a good one before purchasing. Look for a team that has a solid track record in the hotel business, who are good people managers, and have a sensible, challenging, but achievable strategy for growth.

Personal use

A unique advantage of buying a hotel room for investment is that it doesn’t always have to be that. You buy the room and are usually guaranteed a set amount of days per year you can stay in the room yourself. Some hotels allow you do this free of charge, and some will charge a small fee at a fraction of what it costs the regular paying guest. Either way, you have a high-class hotel room ready to stay in should you ever need it.

Buyback options

Now these don’t apply to every hotel room investment, so I don’t want to mislead anyone. But on many of the deals that we possess, St. Camillus in Blackpool for example, the developer installs buyback options so that you can sell your unit back to the developer for an agreed price. These are offered as counter measures to the idea that hotel rooms aren’t great for re-sell value and to incentivise potential buyers.

For the investor, this gives the certainty of capital return (and capital growth). The hotel management team benefit from the capital injection that allows them to expand their business faster.

An investment in a hotel room is a low-cost alternative to traditional buy-to-let property investment. It offers a hassle-free, high yield investment that is particularly attractive to income seekers. It’s a huge and ever-growing property sector and perfect for achieving rental income and good growth prospects.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

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Hotel room investments and why they’re attractive

Hotel room investments and why they’re attractive

Hotel room investments allows many investors a chance to get a piece of the UK’s most profitable Buy-To-Let avenues. Buying into a single room or two can be a low cost yet effective way of providing a good stream of rental income over a period of time. This is no longer an investment exclusively for

Hotel room investments and why they’re attractive

Hotel room investments allows many investors a chance to get a piece of the UK’s most profitable Buy-To-Let avenues. Buying into a single room or two can be a low cost yet effective way of providing a good stream of rental income over a period of time. This is no longer an investment exclusively for the wealthy as it had done in the past often buying entire hotels themselves. The playing field has opened up and enabled anyone with money to invest in one of the UK’s fastest growing asset sectors.

In this article, I will detail why hotel rooms can make for great investment opportunities for those looking to start or expand their property portfolios.

What are a hotel room investments?

Hotel room investments provide an opportunity to buy into a high yielding asset class at a fraction of the cost and stress of actually running a hotel. You buy and own a room in the hotel much as you would with a residential block or student building and earn money through people staying in the room you own.

The day-to-day running of the hotel is done by the management on-site. This means you don’t have to get involved with cleaning, cooking, tidying up or anything to do with marketing the room or taking bookings. For doing all of this, the management will take a cut of the profits made; although you as the owner take the lions share. This provides a hands-off income in the sense that you buy a room and essentially forget about it.

A fast growing industry

The hotel industry in the UK has been growing strongly in recent years and this looks set to continue. BDO recently detailed occupancy levels at record highs and room yields have been increasing for the last 5 years.

Other property sectors are prone to fluctuations in terms of prices, but because the demand for hotels is felt nationwide, they are more resilient to short term markets changes. In fact, though the 83% occupancy rates of London hotels is higher than the regions’ occupancy rates of 76%, the growth in yield per room produced by regional hotels is outstripping London. An investment in a hotel room now is an investment in a booming industry which is forecast to continue to grow.

How do I do it?

The process of buying a hotel room for investment is similar to how you would go about buying most property. You simply:

  • Do your due diligence and pick out a location where demand is high
  • Find a quality hotel which has trusted and established developers and management behind it
  • Select the best possible unit for yourself according to price, specification and floorplans
  • Earn your rental income and sell as and when you see fit

It really is that simple. It is vitally important however to make sure the managing company is a good one beforehand. Look for a team that has a solid track record in the hotel business, who are good people managers, and have a sensible, challenging, but achievable strategy for growth.

Pros of hotel room investment

There are a number of great advantages that investing in a hotel room can offer. These include:

  • Low entry cost- this price can vary depending on the hotel and location but £50,000 minimum is a good starting point.
  • High yields from 8-12%
  • Guaranteed income- your assured yield will be written into the contract between yourself and management meaning they are obliged to pay you your income every month/quarter
  • Hands-off investment- because your hotel room is managed all for you, you can basically forget it exists whilst you watch the money roll in.
  • You own the room and your name will be on the Land Registry as an owner

Personal use

A unique advantage of buying a hotel room for investment is that it doesn’t always have to be that. You buy the room and are usually guaranteed a set amount of days per year you can stay in the room yourself. Some hotels allow you do this free of charge, and some will charge a small fee at a fraction of what it costs the regular paying guest. Either way, you have a high class hotel room ready to stay in should you ever need it.

Buyback options guarantee capital growth

Some hotel room investments offer exit clauses in which the owner can sell their room after a number of years back to the developer for a guaranteed profit. The reasons for them doing this are to pre-empt the capital growth they know will happen on the room and incentivise people to buy their product.

For example, you might buy a hotel room for £50,000. If the developer offers a buyback option to sell the unit back to them in 5 years’ time at a 25% uplift in price, you are guaranteed a £12,500 profit on your hotel room when you sell it back. Combine this with the rent you’ve accrued in the last 5 years and you are well set for a great investment delivering on both rental yields and capital growth.

It’s worth noting however that these buyback options are not mandatory. Once you own the property, you are free to sell it on the open market whenever you wish. The option is simply there if you want an assured exit strategy.

An investment in a hotel room is a low-cost alternative to traditional buy-to-let property investment. It offers a hassle-free, high yield investment that is particularly attractive to income seekers. It’s a huge and ever-growing property sector and perfect for achieving rental income and good growth prospects.

For more information on some of our latest investment opportunities, contact one of the Tarquin Jones team on +44 (0)20 8445 6542 or take a look at our Investments page on our website.

AdminHotel room investments and why they’re attractive
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