As the nation continues to work toward economic stability, more and more people are finding unique ways to save money. From “extreme couponing” to “dumpster diving,” people seem to be finding some pretty interesting money-saving strategies. One of the latest financially-conscious trends to gain popularity is hotel residency, where a person gives up traditional housing to live in a hotel full-time.
For some folks, the idea of living in a hotel sounds crazy. For others, it’s a great way to enjoy lots of cool amenities, free yourself from the burdens of home ownership and, perhaps most importantly, save money. But are the savings really worth it? After all, hotel rates aren’t cheap, and, like renting, living in a hotel provides no long-term financial gain. There’s no way to build equity, you can’t sell the property and there’s no interest to deduct from your taxes. But hotel living does offer other financial benefits. Depending on your personal situation, it could be worth looking into.
The biggest draw to hotel life isn’t so much the long term financial benefit, but the low-maintenance lifestyle and all-inclusive bill. Here’s how it usually works: A hotel manager/owner agrees to allow a guest to stay in the property full-time, usually for a steeply discounted nightly rate. Because hotels base their revenue on occupancy, having a guaranteed occupied room every night of the year can be beneficial. For the occupant, the rate they pay usually includes all their needed utilities like cable, WiFi, phone, electricity, water – basically anything that the hotel would typically offer a nightly guest. Additionally, their rate includes access to other services and amenities offered through the hotel such as housekeeping, 24-hr. maintenance, breakfast and more.
There are also tax benefits associated with this type of lifestyle. Once you establish official residency at a hotel, you may no longer be required to pay the associated hotel taxes on your nightly rate. So if your nightly rate is $50, that’s the price you pay. Of course, this might not apply in all states and there may still be other fees or taxes associated with your rate, but it never hurts to crunch the numbers to see if the option will work for you.
Side Note: Make sure that your hotel has a nice pool!
Let’s use some numbers as an example:
Several years ago, I worked in a fairly upscale hotel that specialized in long-term stays. During my time there, we had two guests that chose to live there full-time, one of which stayed with us for more than three years. Their nightly rate (which was negotiated with the hotel manager) was around $35. Our usual rates varied anywhere between $129 and $189 per night, so this was a very sharp discount.
Excluding any taxes, these guests paid roughly $1,050 per month for their 450 sq-ft rooms, which were studio-style suites with full kitchens. While this may sound terribly expensive for such a small space, when you consider that $1,050 paid for their room, utilities, housekeeping services, hot breakfast every morning and a slew of other amenities every month, it was actually a great deal… at least, for them. Neither guest had spouses or children living with them and neither of them had many belongings. They also traveled quite a bit, which meant that when they were “home” they didn’t want to bother with things like cleaning or repairs – they just wanted to relax. So for a little more that $1,000 a month, these guests enjoyed a carefree lifestyle and saved money at the same time. Of course, neither one intended to live in the hotel permanently, but for their situations at the time, it was the perfect setup.
If you’re considering living in a hotel, be sure to consider more than just the financial aspect. There are, of course, some downsides to living in a hotel full-time. Your neighbors are always changing (this could actually be a good thing, depending on how you look at it), having company may be difficult, and your living space is pretty limited. But if you’re the type who doesn’t need a lot of space and you’re not put off by living next door to an ever-changing population of vacationers and business travelers, then the hotel life might just be for you!