Trump Ocean Resort, Baja, Mexico

A growing trend in property investment over the last year or so has been the purchase of hotel suites, or, as our friends from the US like to call them, Hotel Condos. Leading the way with this superb armchair investment are the Trump Organisation and even with their outstanding track record they may have surpassed themselves with their latest development, The Trump Ocean Resort, Baja, Mexico

The Trump Ocean Resort at Baja consists of three 30 floor towers. Phase one, The Lobby Tower, sold out almost overnight with reservations worth $122m taken within 48 hours.

You now have an opportunity to reserve a unit in phase two.

Just what is it that makes the Ocean Resort such an attractive investment?

Firstly the attractive prices.

Studios are available from $350,000 with a size of 500-600 square feet
One bedroom condos are available from $425,000 with a size of 700 – 1,000 square feet
Two bedroom condos are available from $550,000 with a size of 1,300 – 1,500 square feet

All the suites are fully furnished to the highest possible standards with the cost of the furniture worth a minimum $45,000

Next there is the location

The Resort is just 30 minutes from San Diego on a simply stunning promontory of land overlooking the Pacific Ocean and Coronado Islands, with every suite having an unrestricted ocean view. It is within easy reach of millions of people from Southern California who have the highest GDP and disposable income in the world. The resort has it own quarter mile private beach with restaurants, retail outlets, tennis, spas and other leading amenities.

Perhaps most importantly is the revenue spilt with The Trump Organisation.

The Trump Group are experts at filling luxury hotels. Quite simply nobody does it better than they do. The revenue spilt is 40% to the Trump Group which covers all of their management charges, maintenance and service costs. The remaining 60% goes to the owner. Room rates are anticipated to start at $600 per night. The nearest luxury hotel charges their rooms from $795

Let’s look at the return on investment.

For the least expensive room $600 dollars per night with 70% occupancy gives an annual income of $153,300 which will leave you with $91,980 after The Trump Group’s management costs.

Previous hotels from the Trump organisation have seen their value double soon after completion in addition to fantastic rental returns.

A 70% mortgage on a $350,000 condo at 6.5% will cost you $22,750 per annum leaving you with an annual profit of $69,230

Returns for larger suites will be even more impressive. Of course you also have the option of enjoying your investment as a guest of the hotel which will be free other than local taxes.

The payment profile is 10% deposit on exchange of contracts, 10% after 60 days, 10% after six months and the balance on completion.

Property taxes will be a maximum of $1,000 per annum with nothing else to pay.

The Resort allows you the opportunity to purchase your suite in a number or ways. This could be in a Corporation set up locally, as an individual, via a bank trust or via an off shore corporation. There are plenty of ways of being creative to minimise your tax burden.

There really never has been a better time to buy property in US dollars. Take this example.

Today, £200,000 buys a $400,000 property
5 years growth at a conservative compounded 5% per annum turns $400,000 into $510,512
Taking into account the cyclical nature of the exchange rate you sell your property when the rate is $1.5 / £ giving you a sell price of £340,000 and a profit of £140,000
If you bought a UK property today for £200,000 and it grew by 5% over 5 years your profit would be just £55,000

We recognise there are a few ifs and buts to this calculation but now is the best time in 25 years to buy at a high rate and sell at a low rate.