The Covid19 outbreak has created new opportunities in property investment as real estate investors are targeting hotel buildings for converting them primarily into affordable housing for the workforce. Before the pandemic, property buyers and other stakeholders had considered the possibilities of using hotel buildings in many other ways by converting them into affordable homes, condos, assisted living, and student accommodation.
The idea was to convert hotel buildings into other real estate classes for a better return on investment, and some investors did succeed in it. The long-term slump in the hotel business due to the Covid19 pandemic has created enormous pressure on hotel owners. It has forced them to explore the best ways to redevelop the hotels in some other form of real estate that provides high returns. Investors are choosing various conversion options with emphasis on affordable workforce housing, observes Maxwell Drever.
High Investment in Property Conversions to Continue
The trend of converting hotels into other real estate classes has surged during the pandemic. The interest has grown so much among other investors that, in most cases, they are outbidding established investors in the hotel business. During the pandemic, investors with an eye on alternative use of real estate are putting in so much money in hotel conversions that prices have surpassed the traditional levels by 35%. According to expert projections, the market value of properties sold for conversion in the next five years is likely to be around $25 billion and $30 billion.
Specialized Conversion
Hundreds of real estate investors have undertaken conversion projects of hotels to turn them into profitable ventures like student accommodation, condos, assisted living, and affordable housing. But undertaking the project of converting hotels into affordable workforce housing is entirely different from other conversions because it requires special skills to evaluate the property and foresee its architectural worth. Only those with considerable experience in handling such projects can convert the ideas of maximum space utilization into reality. Maxwell Drever knows very well how to conduct due diligence of the property with help from experienced architects so that they can use their skills and creativity to ensure maximum utilization of space by using every inch of the hotel space to convert into affordable workforce housing.
Abiding the Rules
Another vital aspect in evaluating a hotel for conversion is understanding the impact of the building rules and codes on the project. Converting hotels into affordable housing means stepping into a completely new area where different build rules are applicable. The evaluation process involves a lot of technicality and consideration about how the local legislation could impact the project with respect to maximizing space utilization. Unless it is possible to use every inch of space of the property meaningfully, it can impact the project’s profitability.
As demonstrated by Maxwell, the investor’s expertise could save a lot of money in the project, which puts him much ahead of other investors and establishes his credentials as an expert that draws hotel owners towards him.
