In less than 2 weeks since announcing the new package we've sold over 30 units, which equates to nearly €10 million in fresh investment. There's no way we could have pushed for such a deal even a few months ago.
Ormskirk, Lancashire (PRWEB) October 25, 2008
In view of what's happened to the world of finance and banking in recent days, it seemed likely that stocking your property portfolio was about to become a whole lot more difficult, if not plain impossible. Overnight, banks quite literally turned off the money taps and investments that were looking good 2 months ago are now looking like very different propositions and requiring a whole lot more money down.
One investment concerning hotel rooms however seems to be bucking the trend and may well be the last of its kind that we see for some time to come. After sitting at the top of the Move Channels most popular investments list for over 2 weeks and also attracting unprecedented interest through the Agent's web site, a staggering €10 million worth of luxury hotel rooms have been sold in a little over 2 weeks - a considerable amount of real estate to sell in such a short space of time in any kind of market conditions.
The development is a 4 star luxury apart-hotel consisting of 204 hotel rooms and penthouses with on site luxury spa. Its location, a small fishing village called Sesimbra about 30km south of Lisbon, is already well known to residents of the capital as an upmarket and relaxing retreat for weekends and during holidays.
So why are investors suddenly turning their attention to this one opportunity?
For starters Banif, one of Portugal's key players in the banking industry, is offering 90% finance which is practically unheard of at the moment and have also agreed that mortgage payments will not start until the hotel opens in about 9 months. Secondly, upon completion of the purchase the Developer is prepared to give the investor back 7% in cash which effectively means that investors are able to purchase one of these high-end, fully furnished luxury hotel rooms for just 3% down, or a little over £5,000 for a studio.
And if that's not enough to whet investors' appetites, the Developer has also agreed to pay ALL closing costs. In Portugal, buyers would normally need to allow around 10-12% to cover taxes, bank charges, stamp duty, notary and legal fees. Incredibly, the Developer has agreed to pay all of this back to the investor upon completion. On a studio apartment this is a saving of well over £20,000.
So how did such an enticing deal come about?
Despite the attraction of owning high-end hotel rooms that are managed and marketed for you it's the credit crunch itself that has driven the current boom in our buy to let hotel rooms, as Mark Bingham from hotel room investment specialists Owner Invest explains: "Our current project in the Portuguese resort of Sesimbra is a perfect example. We started handling the sale over six weeks ago but despite plenty of interest in the resort itself, sales were quite sluggish."
"Because of the current economic climate we were able to go back to the Developer and the bank to negotiate a much improved deal. We're now able to offer 90% mortgages, with no payments due until the hotel opens, 7% cash back and all closing costs paid by the Developer.
The Developer is adamant however that this offer will only be made available to investors who place their deposits before November 15th.
"In less than 2 weeks since announcing the new package we've sold over 30 units, which equates to nearly €10 million in fresh investment. There's no way we could have pushed for such a deal even a few months ago."
The hotel will be managed and maintained by hospitality specialists Kasamia who will split the income with investors 50:50 with even the studio hotel rooms expected to generate an overall ROI of 11%+.
Investors also have the luxury of free personal use for up to 56 days and the product is SIPP compatible (Self Invested Personal Pensions) if personal use is not required.