It is not a new concpet - it's been happening in the US for years, and more recently in Germany and other EU countries - but it's certainly a new concept for Irish investors. In a nutshell, you buy a hotel room that lets you stay free of charge in your own pied-à-terre 52 nights a year and the rest of the time you reap half the rental profits from guests, with a guaranteed annual return of 6%.

GuestInvest's first hotel, Guesthouse West in Notting Hill, sold out within weeks and since its launch room owners are seeing returns of more than 6.8%.

Refurbishment is well underway at Nest in Bayswater, a neo-classical building undergoing a multimillion pound refurbishment. It's on schedule to open towards the end of this year. Over 50% of rooms have been sold at Nest and room type D has sold out completely. Only 30% of suites remain.

Johnny Sanderson set up GuestInvest in early 2004 after working in the property business for 15 years. According to Dionne Lewis, head of marketing the scheme, he is supported by a six-strong board of directors, including Geraldine McKenna, ex-chief executive of the Maybourne Hotel Group, and Steve Head, former regional director of Accor Group.

"It is a very viable safe investment as not only are you earning a steady income from it, but there's the capital appreciation to consider as well, " she explains.

Investors are sent a quarterly cheque with a full update on the business.

"The hotels are strategically situated in central locations that will warranty full occupancy, so there is no danger of the room not being let."

Inevitably, as the concept takes off worldwide, prices rise too. Looking at the financial projections for Nest, taking an example of a 'large' hotel room (room C), the purchase cost is Euro456,715 (including 3% stamp-duty land tax at Euro13,999).

Gross revenue works out at Euro54,679 a year charging Euro191 per night with a 78% occupancy rate. The investor gets Euro27,311 minus a Euro760 fee for services contribution.

Room B costs Euro518,804 to buy with an income of Euro30,990 for the investor. While a 'suite' (room A) costs Euro604,546, resulting in an income of Euro35,974.

According to Irish agent Patrick Rowen, director of Deft Developments, based in Rathfarnham, there are two types of investors the scheme will specifically appeal to.

"The first is those who are looking for an investment that can be offset against a pension and has been approved by the Revenue here, " he explains.

"Obviously, if it's part of a pension, you will not be able to use the hotel room for those 52 days, but it will mean higher yields at an increased occupancy rate. The second big market is for business people who travel to London regularly. They can save up to Euro12,000 a year on hotel bills if using all of the 52 nights."

More recently, GuestInvest announced a Euro83m redevelopment initiative to launch a third hotel on the site of the former Whitbread Brewery.

The Chiswell Street Hotel will add a further 200 rooms to GuestInvest's property portfolio, bringing its total to almost 400 rooms across its three hotels.

Rooms at The Chiswell start from Euro364,940. The hotel is due to open in 2008 following an 18-month redevelopment. GuestInvest also plans to expand into at least 10 gateway cities worldwide (Paris, New York, Moscow, Japan, etc).

Irish investor John Kelleher took the plunge with one of GuestInvest's debut properties at Guesthouse West in 2004 for Euro357,336 and sold it two years later making a 13% profit.

"As I visit London frequently, being able to stay each time in luxury surroundings was an ideal solution, " he says.

"From a financial perspective, I was very pleased with the return on my investment from both a capital appreciation and a roomrental basis. I am sure this concept and asset-class is set to grow, and it's certainly one that I have no hesitation in recommending to any prospective investors."

For further information log onto www. guestinvest. com;

Patrick Rowen can be contacted at Deft Developments, Orion House, Main Street, Rathfarnham, Dublin 14;

01 492 8125 or 087 833 0090.