A
hotel room investment is similar to the buy-to-let property investment, but
with shorter-term occupancy. Since it is part of the hotel, it is managed and
advertised like the rest of the rooms. The hotel will take care of everything
and pay you at the end of the month. In Dubai, hotel room investment provides
up to ten percent rental returns.
One
of the biggest benefits of investing in hotel rooms or apartments is the low
cost involved. The cost of a hotel room is equivalent to the deposit required
in the traditional buy-to-let property. Also, since the hotel manages the
day-to-day operations of the room, it is an easy investment option. You will be
kept stress free while enjoying the high yields it provides.
Here
are some tips for profitable hotel investment
i. Create a budget
Whether
you're investing in a mega real estate projects like Meraas Bluewaters
Island or a mega hospitality projects like DAMAC Towers, the first thing you need to do is to plan and create a
budget. Envision what you want to earn and establish the amount you will need
to invest. If you don’t have money upfront, budgeting will help you to save and
invest later. If you are going to take a loan, consider how the interest rate
may affect your bottom line.
ii. Do your homework
Before investing in the hotel room
investment, you have to thoroughly do research to find the best hotel to
invest. Currently, most Dubai real estate agencies are offering
this type of investment and therefore there are many options available in the
market. When choosing a hotel, you should consider the reputation and the
location. A hotel that is placed in an ideal location and with a good
reputation is likely to have high occupancy.
iii. Be careful with the contract
You should be careful when signing
the contract. Hotel companies and developers offer different terms and
conditions on the amount the investor receives in a month. Read the contract
carefully and sign only when you are sure the figures add up. If you don’t
understand the details of the contract, you should consult a professional like
a real estate attorney.
iv. Guarantee on returns
It is important to understand that
not all hotel room investments offer guaranteed returns. So, you should be
careful when choosing a hotel to invest in. Make sure the investment option provides
good returns. Some of the pitfalls in the hotel room investment are
construction delays and lack of the desired occupancy.
If you want to make good returns on
your investment, you should consider DAMAC
Towers by Paramount Hotels & Resorts. This is a development by
Paramount Hotels in conjunction with DAMAC Properties. It comprises of suites
and apartments that are currently being sold off plan at competitive rates.
