1. What is a condo-hotel or condotel?
Think of a condo-hotel (sometimes referred to as a condotel or hotel condo) as buying a condo, albeit one that’s part of a four-star caliber hotel. Therefore, as a vacation home usedom Hotel owner, you’ll benefit from more four-star services and amenities than in a typical condominium.
2. What types of services and amenities are available in condo hotels?
If you can imagine the niceties you would find in an upscale hotel, then you can imagine a condo hotel. Features often include resort-style pools, full-service spas, state-of-the-art fitness centers, fine dining, concierge services, and room service.
In some places, like Las Vegas, you’ll find condo hotels with their own casinos, shopping areas, and entertainment venues. In places like Orlando, you’ll find condo hotels with their own water parks and convention facilities.
3. What is the difference between a condo hotel and a traditional condominium?
The big difference between a hotel and a condo hotel is that while a hotel is usually owned by either an individual or a corporation, a condo hotel is sold unit by unit. Therefore, a 300-room condo hotel could have as many as 300 owners.
4. Is it clear to hotel guests whether they are staying in a condo hotel or a traditional hotel?
A hotel guest will probably never know that the hotel has multiple owners since the property operates like a traditional hotel and is often managed by a well-known hotel company such as Hilton, Hyatt, Starwood, Trump or W. Also each of them The individual condo hotel units will look identical in design and decor, just like in a traditional hotel.
5. Who usually buys condo hotels?
They are primarily sold to people who are looking for a holiday home but don’t want to deal with the hassles that usually come with owning a second home, such as: B. the maintenance of the property or the search for tenants in the off-season.
6. What is the demographic of the typical condo hotel buyer?
The spectrum of condominium buyers is quite wide. There are families who want a second home in a holiday destination. There are baby boomers who are retired or about to retire and are looking for a place to “hibernate”. There are also many investors who buy a condominium hotel unit with no intention of ever using it; You are there for the potential appreciation of the property.
7. Can you stay in a condo hotel?
Condominiums are not usually offered as primary residences. In fact, many of them limit the condo-hotel unit’s use by the condo-owner (typically 30-60 days per year) as the unit is expected and needed in the hotel’s nightly rental program, where it can be offered to guests and revenue generated.
8. Who gets the money when your condo-hotel is rented out?
The hotel management company shares the rental income with the individual condo hotel owners. While the exact percentages vary from property to property, the typical rental split is in the 50% to 50% range.
9. Who finds hotel guests and then cleans and maintains the condo hotel units?
The hotel management company markets the property and books hotel guests. It also maintains the unit and ensures the smooth operation of all the hotel’s services and amenities.
10. What are the advantages/disadvantages of buying a condotel compared to buying typical rental properties?
- Hassle free possession; no landlord problems
- Rental income to offset some or perhaps all of the ownership costs
- A fantastic holiday home that you can use at any time
- A real estate investment at a time when other investments appear less attractive
- High probability of appreciation
- Possessiveness – “I own a piece of Trump”
The disadvantages include:
- Annual cash flow could be equal to or less than annual operating expenses
- Pets are generally not welcome.
- An owner condominium hotel unit is available for rent if the owner so desires, therefore advance reservations are required to guarantee availability.
- The condominium hotel unit is subject to the same market downturns that affect all hotels in the competitive market: hurricanes, terrorist threats, warm northern winters, gas prices, etc., all of which can affect a unit’s occupancy rate and the amount of revenue generated.
11. Are condo hotel units difficult to finance?
Not at all, but they usually take a 20% discount while condos can be bought with less cash discount. It’s also important to make sure you’re hiring a mortgage broker who has had success financing condos . Many banks still don’t do this, but more are getting involved as condo hotels become more available.
12. How long have condo hotels been around and where are they located?
Condo hotels have been around for several decades, but the huge wave of four- and five-star condo hotels that have taken hold across the country began in the Miami usedom Hotel area around the year 2000. The Miami-Fort Lauderdale area still has the most condo hotels, but areas like Orlando and Las Vegas are developing condo hotels even faster and will likely soon surpass South Florida. Other emerging areas include places like the Bahamas, Panama, the Dominican Republic, Mexico, Canada and Dubai.
13. How much do condo hotel units cost?
It’s like asking how much a car costs. There are condo hotels of varying quality. Some obviously require larger amounts of money than others.
There are cheap condo hotels for as little as $100,000. These are typically found in properties that have taken over their use from an existing hotel. Hotel room-sized, they lack kitchen facilities, luxury franchises, and other top-notch amenities.
Then there are the four-star or higher properties, which can start in the $300,000 to $400,000 range but can go up to $800,000 for just a studio unit. One and two bedroom units cost significantly more than a studio. Of course, the studios are fully furnished and finished and will be significantly larger than a typical hotel room and may attract guests like St. Regis, Ritz or W because of their name.
14. What are typical maintenance costs?
Averages about $1.00 to $1.50 per square foot, but the range can exceed $2.00 square foot in the most luxurious properties.
15. Do you buy condo hotel units after construction or can you buy condo hotels before construction?
Unless you’re in a hurry to start your vacation or need to complete a 1031 exchange, it’s best to buy condo hotels that are still under construction as early as possible. Then the prices are lowest and the selection of devices is largest. You’ll likely wait two years or more before closing and taking ownership of your condominium hotel unit, but you’ve locked in the price and are getting the benefit of maximum appreciation.
16. Anything else investors should know about Condotels?
Buying this type of property is about more than the old phrase “location, location, location”. While most condo hotels are located in desirable resort and business districts, the most important thing is a good franchise with a strong reservation system.
Also, don’t be fooled by aggressive rent allocation. One way or another, the developer of the property must staff, maintain and operate the hotel and its services such as restaurants, bars, spas and pools from its share of the proceeds. If they give you a very cheap cut of the rent, they’ll likely charge you a higher monthly maintenance fee as well. Of course, this goes both ways. If the alimony split offered is closer to 50-50, then your alimony payment should be more reasonable as well.