A hotel or resort residence provides more than just a desirable address – it could be a viable investment opportunity
For years, hotel living – a lifestyle that so perfectly blends opulence and convenience – has appealed to a certain breed of super wealthy. But the latest trend for resort and hotel ‘homes’ claims to temper the grandiosity with a dash of economic good sense, by providing owners with an income when they are away.
If you want someone else to do the laundry, don’t fancy changing the light bulbs, and appreciate the luxury of a burger delivered at 3am, then resort homes may be for you. They offer lifetime access to much-loved locations, as well as the interiors and service levels for which you yearn to become accustomed to – be that maids turning the sheets to private chefs cooking six-course meals. In terms of rental income, Sonu Shivdasani, founder and CEO of Soneva Jani, a new development in the Maldives, reckons buyers will enjoy yields of around eight per cent, once you account for what they would have paid to stay in the villa as holiday guests.
These days, such commercial benefits appeal to even the richest homeowner. For the super-rich, homes are now viewed ‘like any other asset’, says Yolande Barnes, head of world research at Savills; they are a source of capital growth and income, as well as things to enjoy in themselves.
Once upon a time, you could luxuriate in the glorious status of your third, fourth and fifth homes. The more sprawling and palatial the better; no expense would be spared. And rather like the superyachts or the private jet, these ludicrously uneconomical investment fundamentals served only to underline the wealth and status of the owner. Today, however, such brash home-buying risks turning you into a laughing stock. A private island in Belize is all very well; but if the local property market is on the wane then your trophy asset loses much of its social lustre.
Besides bragging rights, hotel or resort residences in some countries provide handy ancillary benefits. In some parts of France, buying a new home under the government leaseback scheme means you can duck VAT on the purchase price (as well as certain income taxes) in exchange for leasing it back to the operator for a portion of the year.
Whether all this represents good value for money is hard to tell. The industry is in its infancy; how easy the homes will be to sell on has not been tested and the model has not yet had to endure a major property downturn.
After all, there are plenty of other ways to harvest a rental income from a prize holiday home or city bolthole. The Airbnb revolution has seen a host of premium rental sites for top-end homeowners, for example, removing the headache of finding tenants or liaising with a lettings agency. There are also bells and whistles for every taste, from the entry-level concierge- and-linen services provided by onefinestay.com to the chefs, butlers and maids provided by luxuryretreats.com.
And let’s not forget the hidden costs of extending a stay in paradise… Omar Sharif may have lived for free in a suite in Paris’s celebrated Royal Monceau hotel, but he spent £2,000 per week on food and drink.