Property Investment: Sea views included

Christopher Browne takes a look at a commercial property investment that needed a more hands-on approach
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The Independent Online
Caribbean cruises, three-week stays in the Canaries and get-away- from-it-all trips to Mauritius didn't get so much as a look-in when Jono and Marianne Bassett got married. Instead of leaving for the airport in a confetti-laden classic car, the young couple spent their honeymoon with friends in a Cornish hotel.

But the Bassetts didn't need any advance bookings for the wedding guests, as the couple had just bought the hotel they were staying in.

"It certainly made all the pre-planning and arrangements easier to handle, although we found buying the hotel a different proposition altogether," says Jono Bassett, the owner of the 16-bedroom Boskerris Hotel.

While working in London, Jono, 33, was an IT manager at Credit Lyonnais Securities, and Marianne, a clothing designer, worked at Bay Trading. The pair would often spend weekend and summer breaks in Cornwall. "We'd stay at our parents and at friends' homes and then tour around. One day we were driving along a coastal road when we saw a little gem of a hotel overlooking a bay near St Ives," says Jono. The Bassetts had already discussed the idea of buying a hotel, but they thought no more about it until Jono had a phone call from his father saying it had just gone up for sale. "We came down, arranged several viewings with the agent and owner, and made an offer that was eventually accepted. We wanted to get a fresh start and strike out on our own in an area we both knew and loved. While our savings covered almost half of the hotel's purchase price, our bank agreed to finance the rest when we approached them with a five-year business plan," says Jono.

Most commercial property investors simply buy the premises - anything from a factory, cafe or shop to an office block or car-park - on a 10- to 25-year lease, using the current tenant or a new one to run it. Others become commercial owner-occupiers, buying the building, assets and business and then run it themselves. Hotel owners are one of these, although they buy the freehold of the property - as land is attached - and not the leasehold.

Funding an investor with no previous "front-of-house" experience is rare. But the Bassetts had three unique selling points. First, the Boskerris Hotel had a sound trading history, second, they had a sizeable chunk of cash to invest, and, third, both had sound business backgrounds. The Bassetts' bank knew its customers and liked what it saw.

But a spokesman for Mortgages for Business, which brokers hotel deals for investors, said: "Most investors wouldn't be able to do what they did and would need to approach a specialist broker or commercial bank, submit a good business plan, have three years' accounts and previous experience, and raise a mortgage of 70 to 75 per cent loan-to-value, with an interest rate 1.75 to 3 per cent above base."

"The idea of running a hotel seemed both daunting and exciting, although I had picked up one or two tips from my grandparents who had a guest-house," says Jono. As memories of their wedding began to fade, the Bassetts rapidly grasped the basics of their new trade - boosted by some timely news. Jono's parents, George and Ann, wanted to join them and make the hotel a family business. While Jono looks after the restaurant, kitchen and food-ordering, Marianne runs the bar and reception area, Ann is housekeeper-extraordinaire and George, a former insurance broker, does the books and paperwork. Although it's business as usual at the Boskerris, the Bassetts are refurbishing around their guests. "Most of the interior is old-fashioned and faded and hasn't been touched for 20 years. We're cutting our costs by revamping in phases.

"First it was the roof, then the kitchen and now it's the six main seaview bedrooms," says Marianne. Apart from a one-and-a-half-acre garden and an outdoor swimming pool, their proudest asset is a bayside decking area. "Keen summer surfers will be able to sip champagne and watch the dolphins while their wetsuits dry out," she adds.

Many of the Bassetts' first guests were London friends. "We've moved on a bit since then with some new advertising and brochure-design," says Jono. Their two best outlets are a local magazine and their own website. "Eighty per cent of our guests come from these sources including a number of German, Japanese and Swiss visitors," he says.

Couples who stay in the March-September high season pay pounds 130-a-night (including VAT) for a double room plus full English breakfast or pounds 80 the rest of the year.

"We've had a good winter so far and it looks as if we'll easily exceed our 50 per cent room occupancy break-even point," says Jono Bassett.