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An alternative strategy to hotel investment

Exclusive apartments offer exceptional potential for capital growth under normal investment circumstances. However, according to Bueno Investments, for most properties they have analysed, the figures just do not add up. Quite simply the yield is not there and the result is negative cash flow.

The answer is simple, says Phillip Bueno - invest in a high growth property and have the rental yield!

Large companies are constantly looking for alternatives to the hotel market. Serviced accommodation provides the best of both worlds - the privacy and exclusivity without compromise on service.

Many companies place employees in areas in the north east for prolonged periods of time and a hotel is not a viable option. Corporate weekly lets where the company is not contracted to continue paying rent if their tenant relocates represent a sensible option.

According to Phillip, this only works to strengthen the market for investment purposes. Many properties are let at 100% occupancy for these prolonged periods commanding substantial premiums over shorthold assured tenancies.

From a property investment perspective these represent a low initial cost, high yield investment with the potential for exceptional capital growth. The high-end apartments selected would represent exceptional investments under normal circumstances however in most circumstances an investor would have to service a percentage of the mortgage payment. Corporate weekly lets provide the cash generating model which makes these a viable investment proposition.

Brand new properties are available in exclusive Newcastle areas with achievable yields of 10-15%, said Philip.

An example of a fully packaged investment proposal from Bueno Investments is available here on TheMoveChannel.com.

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