Musings of a London Property Finder

Guestinvest, the buy to let company which allowed private individuals to invest in hotel rooms has gone into administration.  The Guestinvest website is still advertising rooms for sale at £317,000 in The Jones Hotel, Inverness Terrace.  But a canny investor could also have bought a flat in the same road, which may not have come with room service but would have proved to be a more fluid investment, appealing equally to prospective buyers and tenants, be they students, commuters, first-time buyers, young professionals or down-sizers.

A number of flats in Inverness Terrace have sold for around the £315,000 mark over the last 18 months and a flat at 58 Inverness Terrace sold for £250,000 in May, according to the Land Registry figures published by house price comparison website www.ourpropety.co.uk

Guestinvest provided a more luxurious and hassle-free investment, offering to manage and sell the rooms and split the room income 50:50.  The investor was also entitled to stay for free up to 52 nights per year.

Property Week has reported comments from one of the Directors of Savills, Gerard Nolan who is an expert in hotel room investment.  Mr Nolan said that it may be possible to arrange a rescue package for the group and added:

‘The model was flawed as it split the existing income. Splitting the profit is a different story but giving away half your income is flawed. Secondly investors were given 52 days free and nothing is free. You still have to pay for servicing whether it is the owner or a paying guest in the hotel and that was a further hit on income. Hotel room investment can work but the Guestinvest model was not sustainable.’

The hotel group was reportedly put into administration by joint owners HBOS but Johnny Sandelson, the entrepreneur who set up the company is  trying to restructure the company.

Our opinion: Don’t be dazzled by polished presentations and the involvement of major financial backers.  With any investment take a step back and compare the deal with other property prices in the market and seek the help of a reliable London Property Finder.

www.ourproperty.co.uk

www.propertyweek.com

Technorati Tags: Buy-to-let, Buy-to-rent, Guestinvest, hotel rooms, investment, investors, London Property Finder, property investments, property investors, property prices

Tags: Buy-to-let, Buy-to-rent, Guestinvest, hotel rooms, investment, investors, London Property Finder, property investments, property investors, property prices