Advantages Compared To Other Sectional Title Property Investments
Most people like the idea of owning a second property, other than their own home, as a means of earning extra income and enjoying capital growth. The type of property most people choose when looking for a second property is a second home such as a holiday home or holiday apartment. They then possibly leave it vacant, when not occupying it themselves, which is costly. Or they invest in a buy-to-let property, and use it when it is vacant.
Owning a second home of this nature is far from a picnic! One has to think about insuring the property, maintaining it, cleaning it, finding reliable agents and tenants, doing inventories etc. This administration all takes up a huge amount of the owner’s time and energy.
As compared to such a second home purchase, buying a Sectional Title Hotel room offers vast advantages:
- There is a hotel Management Company to take care of insurance, maintenance, cleaning, marketing and sales, etc. By comparison to the owning of a holiday apartment, the ownership of a Sectional Title Hotel unit is hugely hassle free.
- Usually the income and expenses are pooled, so you do not suffer unduly if your individual unit has a maintenance problem, or has a vacancy for a period.
- In a properly structured scheme, the hotel Management Company is incentivised to maximise the net income flowing to you as owner.
- In a large hotel project, with many units within it, there are economies of scale. Management, marketing, sales and other costs are spread over many units, and this brings better bottom line profits to owners.
- Similarly, when several hundred units combine their marketing and sales budget, the resulting marketing is very effective, as opposed to the owner of one holiday apartment trying to find tenants for his unit.