Revealed: The UK’s ‘hot new investment’

Published 03rd Apr 2008

An exciting new type of property investment is set to take the UK by storm…

According to Owner Invest, ‘Aparthotels’ are threatening to kick traditional buy to let and timeshare well and truly into the shade. Managed and marketed on the investor’s behalf with no ongoing bills, these apartments / hotel suites come with freehold entitlement, personal use, 100% mortgages and are SIPP eligible.

Conceived in the USA back in the 1980s, the apart- or condo- hotel concept of marrying second homes with investing in property has now skipped across the Atlantic and matured to appeal to a new breed of investors.

In the traditional buy-to-let role it's the owner who has to put in the hard graft of attracting, vetting and possibly evicting tenants, not to mention collecting the rent and carrying out maintenance and ad-hoc repairs. Apart hotels are now threatening to kick traditional buy-to-let where it hurts as one of its key selling points is that it's managed and marketed on the investors' behalf and therefore hassle-free.

Sometimes called 'serviced apartments' in the UK, aparthotels are springing up all over urban centres and coastal resorts at an impressive rate, in what Jones Lang La Salle describes as Europe being "in the midst of a hotel transaction boom".

Previously we had the timeshare boom, a vehicle that was great for lifestyle and regular usage but wholly ineffective for investment as owners faced low liquidity of assets, high depreciation, restrictions on resale and no actual real estate ownership.

Carving a niche in the market
Today, via the aparthotel model, participants own the freehold of a quality real estate asset with the added value of high rental returns. All of this is then underpinned by capital appreciation. Additionally aparthotels tend to give higher levels of income than traditional holiday homes but the real deal-maker for the investor is the complete absence of headaches as a branded hotel management company takes them all on.

Ian Hayes, Sales Director of Owner Invest, enthused: “Although quite new in Europe, Apart hotel units are quite literally flying off the shelves because they are so attractive and easy to understand. The pricing is affordable for many, the rental returns attractive, capital appreciation, free usage, great locations and the investor owns the freehold. And they're tax efficient. The hardest question that we come across time and again from potential buyers is that it sounds too good to be true. I can quite categorically say that it's not!'

Mr Hayes added: “For an aparthotel to work and be able to compete against traditional luxury hotel chains all the ingredients have to be right. Optimum locations, comprehensive facilities, a respected developer, strong brand awareness and of course good on-site management are just some of those ingredients.

“But in reality, aparthotels are carving their own niche in the marketplace rather than taking on traditional hotel chains head-to-head, as their offering to the holidaying public is very different.

Source: ' Move Channel Ltd '

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