A Castle Of Your Own For Fun And Profit
A castle of your own in Europe…
For many, that’d be a fantasy come true.
But castles are a lot of work and expensive to care for. To keep a castle of your own, you need to be royalty or a billionaire or to operate the property like a business. This is a common strategy with chateaux in France, for example, where many have been converted into bed and breakfasts, hotels, even resorts with amenities like golf courses or spas.
In Scotland, one very special castle is being developed into a golf and spa resort by the same group developing the chateau resort in France we’ve written about in the past. The interesting part about this Scottish castle project is that the developer is inviting small investors to participate.
You could own your “own” castle in Scotland without assuming all the headaches and expenses of being a private castle owner.
The concept is straightforward. Investors are given the opportunity to purchase a room in the castle resort, which is then rented out for you along with the rest of the castle hotel. The developer will operate the hotel, handing all management, maintenance, marketing, etc. It’s a turnkey way both to own and to profit from the charm and romance of a historic castle property.
The castle in question dates to 1550 and sits on 500 acres. This is one of the most important castles in the U.K. and has been renovated and expanded over centuries. Today, the central staircase soars up all four stories of the central tower, and the 500 acres include an 18-hole championship golf course and a five-star spa in the works. The property is known for its smokehouse restaurant, its world-class salmon fishing, and, especially, for two of its one-time guests. Queen Victoria and Prince Albert stayed in the castle during their honeymoon in 1842.
The castle was converted to a hotel in 1922, and the original golf course was built in 1925. Over the last four years, US$22 million have been spent on restorations and upgrades.
In addition to the golf course, the spa, and the fishing, nearby amenities and activities include hiking, riding, and clay pigeon shooting. Think Downton Abbey. Also nearby (though a little less Downton Abbey) are river rafting, gold panning, 4×4 off-roading, and whiskey distilleries that offer tours.
In addition to full rooms in the castle, fractional ownership is available.
Full units start at 390,000 pounds, fractionals at 30,000 pounds. The first eight rooms were released earlier this year (at our Global Property Investment Summit), and only a few fractionals remain available in that initial release. However, the developer has 42 units available in the East Wing, currently under renovation. Additional units will be released soon.
Net rental yields are projected to be 10% per year, nicely above general net rental return expectations of 5% to 8% per year. Couple that with the relatively low investment entry point of the fractional units, and this is a tempting opportunity to become the king or queen of your own castle.
The investment also brings currency diversification if you’re not a sterling-based investor. While the U.S. dollar hasn’t strengthened as much against the pound as it has against other currencies in the past year, the Greenback is at a two-year high against the pound, making now a good time for U.S. investors in particular to consider this sterling-based property opportunity.
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