Long Term lease with Hotels

[devank]

What are your opinions on buying units with 5 year lease term (with 4% increase per year) with hotels?
Advantages are no tenant troubles for 5 years and most costs are covered by the hotel.
Would you buy it if the numbers work??

 

[Aaron_C]

Serviced apartments??

 

[devank]

They are Serviced apartments now till the lease ends. However, it doesn't have to be in the future right?

 

[Aaron_C]

They are Serviced apartments now till the lease ends. However, it doesn't have to be in the future right?

Banks will not accept it unless the lease can be terminated by the owner at any time. Plus, with most of these serviced apartments the hotel has an option to extend after the initial lease term expires. So watch out.