Rest Easy With Hotel Investing

One of the really cool things about writing for M2 and M2woman is that you get to cover a wide range of subject matters. This means that you tend to build up a library of esoteric knowledge useful probably only for pub quiz (although geography is still my foil). It also means that you get a pretty good handle on what the general public is into at the moment and one of the hottest subjects at the moment is hotels. Big ones, tall ones, bespoke ones, far away ones, just round the corner ones, you name it and our audience can’t get enough of them. Of course, it might be that we are all getting into the staycation thing drilled into us while the borders were closed, and it might also be now that the borders are open that there is a renewed stream of tourists coming in. Whatever the reason, hotels are just hot. 

And they are not just hot for people wanting to stay in them, but for a whole lot of reasons they are also just the ticket for investing. There are a whole lot of factors behind this including the fact that residential property investing with old stand-alone houses has suddenly become about as attractive as putting your money under the mattress while the commercial property sector has bypassed the recent legislative changes that have been keeping landlords up at night. And while people might have a perception of commercial property being expensive offices or retail, you can also get into commercial property investing via a hotel unit for as little as $252k thanks to trusted apartment and hotel developers Safari Group. 

These freehold commercial hotel units come with a lease in place and are already tenanted by a hotel operator. This means that you get a guaranteed monthly income based on the lease agreement. Not only are these returns really straight forward but so are the outgoings; just Body Corporate fees and rates which makes it a lot simpler than a lot of other commercial options which might have complex leases in place and high outgoings. 

Depending on where you want to invest and stay, Safari Group has three great options.

 

Ellerslie

660 Great South Road, Ellerslie, Auckland

Located at Central Park Ellerslie with a quick stroll to the Ellerslie train station and easy access to the motorway, this hotel makes for the perfect spot for visitors looking to stay outside of the CBD but with access to it in just a few minutes. This hotel is currently under construction and will be open in September 2023. 

The Numbers:

Rent Per year: $15,000+gst 

Outgoings: $2,240 

Gross return: 6% 

Estimated Net return: 5%

 

Wellington 

123 Taranaki Street, Te Aro, Wellington

Ramada Wellington has a stunning location near Wellington waterfront, Cuba Street, and Wellington Central offering easy access to the heart of the city, cool eateries, shopping and work if you need to. This Hotel is already completed and is fully operational. 

The Numbers: 

Rent per year: $17,000+gst

Outgoings: $5,600 PA. 

Gross return: 6.6%. 

Estimated Net return: 4.47%

 

Parnell

25 The Strand, Parnell, Auckland

LQ Parnell is located in the historic and prestigious suburb of Parnell, and near Auckland’s key attractions, tourist destinations and the CBD, including the University of Auckland, Double Grammar Zone, and Britomart, as well as Parnell’s own assortment of world-class eateries and fashion stores. This hotel is currently under construction and will be open in late 2023. 

The Numbers: 

Rent per year: $17,819+gst 

Outgoings: $3,400 PA. 

Gross return: 5.6%. 

Estimated Net return: 4.6%