Kimberley Hotel

Overview

Welcome to The Kimberley Hotel which offers a unique investment opportunity. Residents can relax and enjoy the

ambience of this elegant Victorian Town House situated only metres from the Harrogate International Conference Centre. Whether your stay is for business or pleasure. The friendly team are there to welcome you. With 5 meeting rooms the accommodation is ideal for the business guest and provides the perfect blend of comfort yet contemporary style. Equipped with state-of-the-art facilities, the range of meeting rooms allow for one day events or residential courses. The comfortable lounge; complete with wifi Internet access; is the perfect place to relax and reflect and of course, guests are always welcome to sample some of the fine wines and local beers before retiring for the evening.

Investment case:

ON A HOTEL ROOM

Purchase price (discounted) £148,500

Deposit at 25% £37,125

Rental income, 12% guaranteed rental of £148,500 in Year 1

gives £17,820 per year

Mortgage rate at 9% - £10,023 per year

Management cost £850 per year

So, for investment of £37,125, the yearly income, net of all expenses, is £6947 per year, OR AN OUTSTANDING RETURN OF APPROXIMATELY 19% ON YOUR CAPITAL INVESTED.

ON AN APARTMENT

Purchase price (discounted) £315,000, and full purchase price £350,000. Deposit is 15% of the discounted price on exchange, assuming you can obtain an 85% buy-to-let mortgage on completion. If you cannot, you have the option of 75% vendor finance and therefore an additional 10% cash input is required. This is the preferred route for non-UK citizens who require non-status finance.

Rental income of 12% guaranteed for year 1 of £315,000 gives £37,800 per year. Mortgage cost at 7% = £18742. Management cost £1250 per year. So, for investment of £47,250, the yearly income, net of all expenses, is £17,808 per year net of all expenses, OR AN OUTSTANDING RETURN IN EXCESS OF 38% PER ANNUM ON YOUR CAPITAL INVESTED. Both types of investment are suitable for inclusion in a SIPP.

ADVANTAGES OVER TRADITIONAL BUY-TO-LET

If a traditional buy-to-let investor purchases an apartment, they have to furnish it, insure it, find a tenant, and usually employ a third party management firm to look after it for them. When it is not rented out they still have all the outgoings, such as council tax, electricity, gas, management and so on. By purchasing a Hotel Room, the investor has none of these problems. The purchase price includes all high quality fixtures and furnishings.

OUR OPINION

This opportunity is a real hands- off investment. Apart from the small annual management charge there are no other outgoings. The guaranteed yield of 12% in the first year, based on the discounted price, is remarkable, and given the ability to leverage your investment (initially with developer finance, possibly then replaced by a buy-to-let mortgage based on full valuation of the apartments) the returns on capital invested are amazing.