Sometimes called ‘serviced apartments’ in the UK, Apart-hotels are springing up all over urban centres and coastal resorts at an impressive rate, in what Jones Lang La Salle describes as Europe being “in the midst of a hotel transaction boom”.  Previously we had the timeshare boom, a vehicle that was great for lifestyle and regular usage but wholly ineffective for investment as owners faced low liquidity of assets, high depreciation, restrictions on resale and no actual real estate ownership.  Today via the Apart-hotel model, participants own the freehold of a quality real estate asset with the added value of high rental returns. All of this is then underpinned by capital appreciation.  Additionally Apart-hotels tend to give higher levels of income than traditional holiday homes but the real deal-maker for the investor is the complete absence of headaches as a branded hotel management company takes them all on.

For an Apart-hotel to work and be able to compete against traditional luxury hotel chains all the ingredients have to be right. Optimum locations, comprehensive facilities, a respected developer, strong brand awareness and of course good on-site management are just some of those ingredients.  But in reality, Apart-hotels are carving their own niche in the marketplace rather than taking on traditional hotel chains head-to-head, as their offering to the holidaying public is very different.

 Ian Hayes, Sales Director of Owner Invest said:

‘Although quite new in Europe, our buy to let Apart-hotel products are quite literally flying off the shelves because they are so attractive and easy to understand. The pricing is affordable for many, the rental returns attractive, capital appreciation, free usage, great locations and the investor owns the freehold. They’re also tax efficient. The hardest question that we come across time and again from potential buyers is that it sounds too good to be true. I can quite categorically say that it’s not!’

The clue is in the name, Apart-hotels are more ‘apartments’ rather than ‘rooms’ and even the largest traditional hotel suite would be hard-pushed to compete.  With generous square metre sizes relaxing, entertaining, dining, working and sleeping can be done in separate areas enabling the children to sleep whilst Dad watches TV and Mum enjoys a glass of wine with friends.  An equipped kitchen also allows the flexibility of eating in thus saving money and releasing guests from strict hotel meal timetables – a lazy late breakfast in bed is now a possibility.  Likewise a washing machine saves on laundry costs or taking home a case full of dirty linen. 

An Apart-hotel feels like home-from-home.Marbella Royal Suites for example, has come about through a partnership between Owner Invest and hotel management team Kasamia.  This resort ticks the boxes for 1) Location – Benahavis is just ten minutes from Marbella and Puerto Banus and the resort overlooks the sweeping fairways of El Paraiso golf course. And in an established tourist destination such as the Costa del Sol, passenger numbers for Málaga International Airport in 2007 are up a mammoth 43% on 2000 to 13.5 million and resort and hotel occupancy rates remain encouragingly high. 2) Comprehensive facilities – Multiple swimming pools, fitness centre, Spa and business centre, 3) Good on-site management – Resort management team Kasamia, the brains behind Accor and Club Med, use distribution networks built up over many years to maximise occupancy rates and returns and are also responsible for maintaining the investors asset to an immaculate state of repair and cleanliness. More info about the Royal Suites buy to let opportunity can be found here

Similar to other Apart-hotel resorts Marbella Royal Suites has all-inclusive fully-furnished pricing, an absence of bills and annual charges and eight weeks personal usage each year.  Its also SIPPs eligible if the investor doesn’t require the personal use. You can find out more about using Self Invested Personal Pensions to purchase investment products such as these on www.ownerinvest.com/sippOperating on a seven-year leaseback scheme, owners receive a 50% net share of rental income on a ‘pooled’ basis – so even if their particular unit is unoccupied, others will be.

Prices start at 99,000 GBP for a fully furnished 1 bedroom apartment. 2 bedroom apartments are available from 168,000 GBP and, according to the valuation by Spanish bank Banesto, are already worth 235,000 GBP arriving with 30% capital already built in.

 Buy to let Apart-Hotels could be the simplest yet most lucrative real estate investment on offer today.