Buying an apartment in a hotel, is it a good investment?

Buying an apartment in a hotel can have both advantages and disadvantages, depending on your specific circumstances and goals. However, there are some general reasons why it might not be the best investment for everyone:

Limited use: When you buy an apartment in a hotel, you may have restrictions on how often you can use it. This may be because the hotel wants to rent out the unit to other guests when you're not there or because there is a limit on the number of days you can stay each year. This means that you may not be able to use your apartment as often as you'd like, which can be frustrating if you're planning to use it as a vacation home.

High costs: Apartments in hotels can be more expensive than similar units in other buildings. This is because you're not just paying for the apartment itself, but also for access to the hotel's amenities and services. You may also have to pay extra fees for things like maintenance, cleaning, and property management, which can add up quickly.

Lower appreciation potential: In general, apartments in hotels don't appreciate in value as much as other types of properties. This is because the value of the apartment is tied to the performance of the hotel. If the hotel is doing well and attracting lots of guests, your apartment may increase in value. However, if the hotel is struggling or becomes outdated, the value of your apartment may decline.

Rental income limitations: If you plan to rent out your apartment when you're not using it, you may have restrictions on how you can do so. The hotel may require you to use their property management services or limit the number of days per year that you can rent out the unit. This can limit your ability to generate rental income and make it more difficult to recoup your investment. It depends highly on the contract with the hotel how you get your rent paid. You have no control over which units the hotel fills up first and if the hotel is empty (as happened in the lockdown) they might end up stop paying rent altogether. Your mortgage, rates, insurance etc do not stop

Lack of control: When you own an apartment in a hotel, you're essentially investing in a business that you have little control over. You're relying on the hotel to manage the property, attract guests, and maintain the building. If the hotel management makes poor decisions or the hotel's reputation suffers, your investment could be negatively impacted.

Overall, buying an apartment in a hotel can be a risky investment that may not be suitable for everyone. Before making any investment, it's important to do your research, consider your goals and financial situation, and seek the advice of a professional financial advisor like myself.

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