They actually MAKE you money!
The possibility of owning a hotel room is still a pretty novel concept for a lot of investors, and throughout the years we’ve had a lot of questions about what our co-ownership model actually looks like. Are you buying a share of a hotel room to become a co-owner of the actual real estate? Or, are you buying a timeshare?
The short answer is THIS IS NOT A TIMESHARE. You are buying real estate that is designed to generate monthly income for you, and comes with the benefit of free vacation time every year. But let’s get into more detail…
What is hotel room co-ownership?
Ruebush Hospitality Group has created a modern way to acquire valuable income properties, even if you have a small investing budget. We divide each of our hotel rooms into 10 “shares” of ownership. You can buy as little as 1 share, or all 10 of them. This makes the prospect of owning valuable luxury hotel property within the reach of more investors.
For example, a hotel may have 10 rooms. Each room has 10 “shares” of ownership. So, the entire hotel has 100 “shares” of ownership. Some people may own 1 share. Others may own 2 or 3 shares each. Someone may own 2 entire rooms (20 shares). The combined total of owned shares represents the entire ownership of the hotel.
When buying one or more shares of 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. If you buy 1 share of a hotel room, you are registered as the outright owner of 10% of the actual real estate represented by that room. If you buy all 10 shares, you are registered as the outright owner of 100% of the real estate represented by the unit. You are the full legal owner of real property.
Co-ownership of real estate is nothing new. Business partners, spouses, parents and their children, religious groups, and many others have co-owned real estate for hundreds of years. The difference is that we modernized and simplified this system and applied it to luxury income property, namely luxury hotels.
The owners of the shares of real estate in our hotels not only own valuable real estate which they can later resell or pass on to their heirs, but they enjoy the usage of the property and their fair share of the income generated by the entire hotel. We put a class of investment that used to be reserved only for multi-millionaires within reach of anyone.
How does buying a hotel room differ from buying a timeshare?
A timeshare, or vacation rights ownership, is a model of dividing property usage 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. They rarely actually own the real estate.
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 be very costly, 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, hotel room co-ownership 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 hotel.
The only similarity between a hotel room investment and timeshare is the fact that your investment comes with free personal usage time. In a timeshare, you can enjoy a free vacation once a year, but you don’t get any income the rest of the year. When you co-own a hotel room with Ruebush Group, you get monthly income from the hotel all year long AND you can enjoy a free vacation once a year.
How much free personal usage do I get?
Each share has 3 usage days per year. So, if you own 1 share, you have 3 free vacation days per year. If you own 3 shares, you have 9 free vacation days per year. If you own an entire hotel room, you have 30 free vacation days per year.
How does the title deed registration work?
We are developing luxury boutique hotels in Batumi Georgia. Your hotel room investment is protected by every legal means available under Georgian real estate law.
Upon your 10% initial payment of the total purchase price of the hotel room, you are registered at the Georgian National Registry as “Future Owner” of the property, and the cadastral code of the real estate is assigned to your name. Upon paying 100% of the purchase price, you are registered as “Owner” of the property.
Note: at Ruebush Hospitality Group we allow you to divide the purchase price with monthly payments as long as you make 10% initial payment. This makes buying shares or entire hotel rooms even more affordable.
The Georgian real estate registration process is one of the simplest in the world. All we need is a copy of your passport and your legal address and telephone number. The procedure typically takes about 15 minutes, and costs about $50 (depending on GEL to USD exchange rate).
Did you know? You can register your hotel room in your name without even traveling to Georgia. Our simplified e-Sign process allows you to make your investment entirely remotely. You supply us a legal “Power of Attorney” document and we do all the paperwork for you. Hundreds of people have bought, earned income, and even resold hotel rooms with us without ever even stepping foot in Georgia.
Is rental income guaranteed?
Yes. During the first 3 years of your ownership in an operational hotel room, we guarantee you cannot earn less than 10% return on your investment, but you can definitely earn more.
Based on our historical performance and market outlook, we project 18%+ yearly return on investment for our hotel rooms, so in reality most of our investors earn much more than the guaranteed 10% minimum. But, just for your peace of mind, we guarantee you cannot earn less than 10% your first 3 years.
We even offer a buy-back guarantee. If you hold the investment at least 3 years, we guarantee to buy the property back from you for full market value, or 10% more than you invested, whichever amount is bigger.
If I own the property, why can’t I live in it or use it longer than my personal usage days if this is not a timeshare?
Our main objective is to generate the maximum amount of income for our investors by operating a luxury hotel. 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.
It is your actual property, but the idea is that we are all business partners in a luxury hotel. So, we protect your business investment by limiting the usage of your neighbor or the other co-owners of your room. And we protect the business investment of your neighbor by limiting your personal usage. However, if you really want to stay in your room longer than your free days, you can. We give all our investors 20% discount on the normal nightly rates of any room in any of our hotels. So, pay the discounted nightly rate and stay as long as you want.
RELATED: Passive Income Real Estate
