Have you heard about investing in a hotel apartment? What is a hotel apartment? Or better, Cautious about investing in a hotel apartment? In this article we have put together reasons why we believe this subject deserves a second look.
Hotel apartments guarantee high return real estate ventures and should be considered by all investors, even with the misconceptions surrounding the industry’s economic value and future. This trend has been in existence for the past 2 decades, with more reputable hotel management looking to expand to new economies.
There are a variety of reasons why investors and homeowners may have hesitancy toward investing into hotel apartments. The myths are there. Now let’s take a look at the misconceptions and put them to bed, once and for all.
Before COVID-19 hit, the hospitality industry was one of the biggest sectors in the global economy – worth over US$570billion and employing almost 10% of the world’s working population. And while it faced unprecedented challenges in the past year, experts are confident that the industry will bounce back to pre-pandemic levels as soon as 2022/2023. The industry faced a temporary setback and will make a full recovery.
Travel and hospitality is one of the most lucrative industries, providing a great deal of services to different people. Year-on-year, the industry witnesses a rise in travellers globally. The hospitality industry has contributed to revenue generation in Ghana.
Ghana recorded 411,000 international arrivals in the first nine months of the year 2021, hinting at a recovery over the course of the year. The pandemic led to a diverse array of market sentiments among the investor community, as it negatively impacted livelihoods and left its mark on the economic landscape. Investments slowed in 2020. But according to macroeconomics data, the first quarter of 2021 indicated signs of a recovery driven by the easing of restrictions and vaccine administration. Recovery from the pandemic has been slow yet steady.
Prior to the pandemic, there was a shift in demand from strictly high-end residential to a fusion of niche hospitality and high-end residential properties – hotel apartments.
The demand for investing in hotel apartments is steadily growing every year at a quicker pace than the traditional residential properties. Today, many prefer this type of investment because of its hassle-free way of earning income. It’s a hands-off investment. Also, many investors are realising that serviced apartments are becoming a top choice for leisure and business travellers.
A serviced apartment is a furnished apartment, similar to a hotel room, available for long- or short-term stays. A serviced apartment is a normal sized studio, one, two or three-bedroom apartment, on average offering 30-50% more space than a typical hotel room. You have more room to work, relax, spread out and live – with added amenities such as a pool area, gym, salon and other recreational facilities.
The high rental yields and guaranteed annual returns on investment (ROI) will see most property investors jumping for joy. But why the doubt and suspicion surrounding investment in hotel apartments?
What are the risks?
Financial risk – Are the returns really guaranteed?
These beautifully furnished apartments, often with scenic views and luxury amenities, offer high yields and guaranteed annual returns to investors. The offer seems almost impossible to resist. But investors hesitate in their decision to invest after mulling things over.
They consider the financial risks. They need assurance that the guaranteed annual returns will stand if things don’t go as expected.
Serviced apartments have been and continue to be a stable business concept when implemented correctly. A balance between goals of the developer and unit owners has to be achieved for the project to succeed. Apart-hotels serve as a viable second-home or vacation destination. The downfall of a property typically occurs when developer promises are not delivered, and/or when purchasers have their own misconceptions about what they are actually buying.
When you are looking to purchase an apart-hotel unit, the most important question is feasibility. ‘Is it a property that will generate good returns; and is the property’s location going to aid in that?’
The returns provide an investor with a known and fixed income on their investment. It produces a stable, high yield for a fixed period. The investor benefits from knowing how much income the investment will generate.
Often, this type of return is combined with a guaranteed capital growth at the end of a fixed period.
Investing in a hotel apartment also offers guaranteed returns on the capital invested. In such a scheme, the investor buys a unit and will be guaranteed a fixed price to sell the unit back to the hotel management team after a fixed period. For the investor, this gives the certainty of capital return (and capital growth).
This is a hassle-free, high-yield investment particularly attractive to income seekers. When combined with a guarantee of capital growth, investors can benefit from a steady stream of high income with the additional benefit of an element of protection against inflation. Your investment is looked after, maintained and secure, and gives you the assurance that your asset will generate an income. With individuals who desire an annual dividend with minimal effort, this is certainly worth consideration.
Apart-hotels are excellent real estate investments right now. A seasoned investor understands that they are making a high-profile investment that pumps out great investment returns.
The hospitality industry is roaring again; you should own a piece of it.
Luckily for you, we present real estate investment opportunities to investors like you. Invest and own a branded, serviced apartment unit and earn guaranteed annual returns that support your financial needs.
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