4 secrets for a profitable hotel investment

2:51 AM RAWAT 1 Comments

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.

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