The “earn money while others sleep” slogan of GuestInvest drew in a large number of investors. However, the scheme has left many with sleepless nights as they fight to get back compensation from the failed scheme.
The hotel room scheme was sold as part of a self-invested personal pension (SIPP) to many consumers. Investments were worth up to £400,000 and guaranteed a six percent return and 52 nights stay. However, investors were not aware of the risks of investing in a hotel room.
The scheme did not deliver on the promised returns and when GuestInvest went into administration, millions of pounds worth of investments were lost. Investors had to reclaim via compensation or seek alternative options.
Hotel room investments
Owning a hotel room is not like owning a home. While a home is likely to increase in value over time, a hotel investment won’t see the same growth.
You may want to also take into consideration before investing the factors out of your control. The performance of your investment may depend on the weather, time of year, and local economy.
Many investors put money into a timeshare of a room, also known as fractional ownership. Investors who owned the room in the colder months did not get as good a deal as those who received the hotter months as it is more likely to see holidaymakers.
With a promise of a low risk and high return that did not perform well, advisors have been accused of financial mis-selling.
Advisers are accused of mis-selling the scheme as clients were misled on the level of risk and returns.
If you have invested in GuestInvest or a similar hotel room or property investment, it may have been mis-sold. Get in touch today to speak to one of our expert litigators about your claim.