The possibility of owning a hotel room is still a pretty novel concept for a lot of investors, and over the past few weeks we’ve had a lot of questions about what the ownership model actually looks like. Are you buying a share of the hotel room to become a co-owner? Are you buying a timeshare?
The short answer is no. You are buying real estate that is designed to generate monthly income for you, and comes with the benefit of three weeks of free vacation time per year.
But let’s get into more detail:
How does a hotel room investment differ from co-ownership?
When buying a hotel room in one of Ruebush Hospitality Group properties, you get the title deed registered in your name, exactly like you would if you were buying a house, a plot of land, or a condo/apartment.
That means you become the full legal owner of the property. Of course, if you so desire, you still have the option to co-own the hotel room with a spouse, a friend, or a family member. But Ruebush Group will only act as a manager, and will not own any percentage of your real estate.
How does buying a hotel room differ from buying a timeshare?
A timeshare, or vacation ownership, is a model of dividing property ownership or its use rights. Timeshare properties are usually condo units in resort towns, in which multiple owners buy rights to use the same property, and are allotted a period of time (usually a week out of a year) for their particular use.
In that regard, a timeshare is not a real estate investment, you are essentially pre-paying your vacation accommodation year after year, whether you end up using it, or not. Not only that, but timeshares come with the obligation of mandatory yearly maintenance fees that can run at about $1000 a year, and are subject to yearly increases. Since timeshares are not designed to be a property investment, re-selling your timeshare will not make you any money. In fact, according to sellmytimesharenow.com, you can expect to sell your timeshare for only 50% of what you paid in the first place, and sometimes even for as little as 20-30% of the original price.
Unlike a timeshare, a hotel room is an asset that generates income and can gain value over time. The property is registered in your name, and managed as part of a hotel to provide you with monthly income. After purchasing your hotel room, you are not expected to make any additional payments. Hotel maintenance costs are projected ahead of time and are taken from the income generated by the room.
The only similarity between a hotel room investment and timeshare is the fact that your investment comes with three weeks a year of free personal usage. In addition to receiving yearly returns, you can enjoy the subtropical Black Sea beaches and explore the breathtaking nature of Adjara with your family or friends for free, as part of your investment.
How does the title deed registration work?
Your hotel room investment is protected by every legal means available under Georgian real estate law.
- Upon 30% payment of the total sum for the hotel room, you are registered at the Batumi Public Service Hall as "Future Owner" of the property, and the cadastral code of the real estate is assigned to your name.
- Upon paying 100% of the amount, you are registered as "Owner" of the property.
Georgian real estate registration process is one of the simplest in the world. All you need to bring with you is your passport. The procedure typically takes about 15 minutes, and costs about $60 (depending on GEL to USD exchange rate).
Did you know? You can register your hotel room in your name without even traveling to Georgia.
Click on the button below to contact an investment advisor to find out details applicable to your particular situation.
Is rental income guaranteed?
Yes. We guarantee your monthly income for 99 years, starting January 1, 2021. Even before the hotel opens its doors to guests!
Based on our historical performance and market outlook, we project 11.94% yearly return on investment for our hotel rooms.
Plus, we also warrant to buy back your share for more than the original price, as long as you hold your investment for at least 3 years.
If I own the property, why can I only use it for three weeks a year?
Our main objective is to generate the maximum amount of income for our investors. Personal usage time is therefore limited for two reasons: mainly because we guarantee a certain yearly return on investment, but secondly to protect the integrity and aesthetics of a luxury boutique concept, since the hotel rooms are not designed for long-term living.
If you still have questions, feel free to start a conversation with one of our investment advisors on our live chat, by clicking the chat icon in the bottom right corner of this page. Or send us a quick inquiry by clicking the button below: