Which One Is the Best Investment Property?

If you’ve got money – you should invest it! Why? Because the world’s economic system implies constant depreciation of currencies. In other words, one million dollars today is more valuable than one million dollars in ten years.

Putting money in different assets is the only way to avoid or at least diminish this process. And real estate is one of the most favorable types, as it’s considered to be stable and safe in comparison to others. But should you buy an apartment, or an office, or a hotel room? What is the best investment property?

Reasons for investing

If you only want to protect certain sum of money from depreciation, you can buy an apartment somewhere in the neighborhood and just leave it be. Even if you never rent it out, as long as you keep it in decent condition, you’ll be able to sell it for a higher price in a few years, thus breaking even. Probably.

In general, real estate grows in price over time. But it also depends on various factors such as economic situation, the demand on the property objects in the given area and time, legislation changes and so on. That’s why most people prefer investing in objects that can bring you money.

There are two ways to make money on investment – either rent it out (and earn little sums every month) or resell it for higher price later (and earn a considerable sum). Often both methods are used. But which is the best investment property type?

Hotel apartments and why it is your best choice

Almost any type of real estate can be used for purely commercial purposes. But it’s always better to choose the one designed for it. Hotel apartments offer the following advantages:

1. Considerably low market entry threshold

If you want to invest in hotel business, you don’t have to buy the whole building. As for single room prices, they are comparable to that of good apartments in popular areas or offices in business districts. Of course the more popular destination you choose (business centers in Europe or USA, Dubai’s resorts, or Asian tourism centers), the higher price you can expect.

2. High return on assets

Being a purely commercial object, a hotel generates a lot of income, and part of it goes to the investors who bought rooms there. Some managing companies agree to pay a fixed amount of money (which is similar to regular rent), while others offer payments depending on the hotel’s performance. 5 per cent per annum and more is considered a good return.

3. Low risks

The success of your business always depends on your skills and knowledge. Naturally, few investors have any expertise in hotel business, but fortunately they don’t have to! All hotels are managed by professional companies, which minimizes the risks.

4. Sound liquidity

Liquidity is one of the most important parameters of any asset. The higher it is, the faster you can sell your asset, thus turning it into money. Unlike other types of property, a hotel room can be relatively quickly sold to another owner or to the managing company.

5. Doesn’t require the investor’s personal participation

Another reason why a hotel room can be considered the best investment property is that you don’t have to manage it by yourself. Since the building is controlled by the managing company, all you need to do is relax and focus on other tasks – your own business, family, sports or art career.