If you are looking to create a steady stream of income or benefit from a tax deduction to your pension, investment in a hotel can be highly beneficial. Reports indicate that hotels produce an average gross investment of approximately eight percent. If you compare this to the four percent on share dividends and one percent of cash deposit accounts, you will gain some idea of the income advantage of UK hotel investment. This article will discuss, in addition to financial gain, all the positives to UK hotel investment.
#1: Low Cash Requirements For Investment
Investment in UK hotels is commonly compared to investing in buy-to-let properties. You can purchase a form of real estate and receive income from guests when the real estate is a hotel. Yet, the initial cost of a buy-to-let property is out of reach for most people. For most of property investors making buy-to-let investments, mortgages are required to fund the purchase price. However, a hotel investment is typically less than the deposit amount required to make a buy-to-let investment.
#2: No Mortgage Is Required
The reduced cost of purchase means that no mortgage is required for the investor to, well, invest in the hotel. Most investors will use existing savings to fund their projects or use a lump sum portion from pensions; however, as there is no mortgage required you can be more flexible regarding the financial situation. You will not be reliant on the bank; therefore, you will not be subject to any of the lending rules.
#3: Reduced Administration In The Investment Process
Contrary to popular belief, UK hotel investment processes are highly straightforward and can be easily completed. The process involves investing in the property, which will become registered to you, and then you receive income on the real estate. There are no complicated cost deductions or tax reliefs to manage, and the tax return administration is simple to complete. In fact, you could stay in the hotel you have invested in if you feel it is a good investment.
#4: A Certain Source Of Income
The hotel investment income can be based on the profit made by the hotel management company; however, many investors tend to take advantage of the deals offering guaranteed income. This tends to provide a certainty of income that is not available on most other property investment alternatives. For instance, if you invest in a company's shares and the shares fall, it is likely that the dividend income you receive will be reduced. If, however, you invest in a hotel there is a guaranteed income regardless of the dividend received.
div>#5: An Immediate 'Set And Forget' Investment
Typically, hotel management will take care of the daily running of the hotel; as well as the marketing and advertising of the property. This is beneficial for you as you merely invest in the property and then 'forget about it' waiting until you receive passive income.
As can be seen, investing in the UK hotel industry can be highly positive as it is a passive income that does not require much money to make the investment.