As a means to a passive income, investing in a hotel room is a brilliant idea. You’ll get the experience to take part in a growing industry but with only a fraction of the cost you would pay for an entire hotel.
Besides, you won’t need to get into the nitty gritty details of hotel management which includes changing the sheets, cleaning the rooms, or preparing breakfast. All of this can be done by the hotel staff for a small percentage of your income. Here are some things you need to know before you begin your investing journey:
1. Know The Brand
Open up your eyes to the already existing industry of hotel room investment. You must know the value of the place you’re wanting to invest in. It helps to know the hotel’s history, the in-flow and out-flow of customers and the management which runs the hotel. Don’t get fooled into buying a hotel room where the management isn’t well established. You want a place where customers come in happily and leave satisfied.
2. Know Thyself
Before you begin investing, make sure you have your mind made up about the kind of hotel you want to invest in and your budget. While midscale hotels will offer a relatively cheaper price, they are not steady during economic downpours. On the other hand, luxury hotels can resist such economic crisis but they are much more expensive. This makes luxury hotel rooms a safer option for investment. It’s also nice to have a backup strategy just in case something bad happens. Have the idea in your mind that there will be a time when you might have to sell it. So, invest appropriately.
3. Know The Market
Just last year, over 5 billion pounds were invested in the hotel sector in the UK. This indicates that this is a growing industry so be prepared to meet fellow investors who have the same thing in mind as you do. It helps to be as precise about the location as possible. Know the strengths of the location, know its weaknesses. Know whether the hotel market succeeds or fails in the area, how it has fared in the past etc.
4. Know Thy Planet
Hotels have a huge influence on the environment. With the number of items needing to be washed being exponentially greater than the number of rooms, there is a huge amount of water which is used to sustain a hotel. Did I mention swimming pools and disposable plastic bottles for bathroom essentials? Make sure to read on the hotel’s environmental policy and invest smartly. You are fortunately part of a changing world.
5. Know The Deals and Extras
Some hotels have a special policy for their hotel room owners. They may offer you free lounging for a certain number of days or may treat you with complimentary dinner or membership of their gym. Make sure to read up on these policies of each hotel you may have shortlisted. Choose the one with the best overall picture.
Keep these five tips in your mind and you’ll be on your way to earning a good on-the-side income. The hotel sector is growing each day so you’re bound to make some profits off of it. But, invest smartly.