An Alternative Investment To Buy To Let

 

At present "buy-to-let" is very much the rage of those with money as an investment. The concept generally works fine, even if you get problems with tenants and in some cases letting agents, who promise some things and do others. It has now been refined further, so that it is now possible to invest in hotel rooms.

Taking the latter, for an investment of about £350,000 in one room in a five star hotel, you can get a return of about six percent, with of course the hoped for capital appreciation.

But given the current state of prisons, or rather the lack of them, it strikes me that a similar concept could be used to build prisons. Given the current Government's policy of locking everyone up, it would be an absolutely gold-plated investment. According to Government figures from 2004 build costs of a prison place are just above £100,000 and it costs £40,000 a year to keep someone in jail. I would think that the £350,000 for the hotel room and the £100,000 for the cell also include all of the other costs like security, facilities and the cost of land.

With the luxurious hotel, you get half of the money from people who rent the room, with the rest going to the management company who keep the guests to the standard they deserve.

It is when you look at the costs of prison, that the numbers just do not stack up.

The six percent return means that the investor would probably be happy with a guaranteed £6,000, leaving £34,000 a year for the care, welfare and keep of each prisoner. The prison authorities get nearly twice the money the five star hotel needs for each guest. And the hotel makes a profit too!

So why do we as taxpayers get such a poor return in terms of recidivism, when prisons do such a bad job in reforming those that are outside society?