Think of a condo hotel (also sometimes called a condotel or hotel condo) as buying a condominium, although one that’s a part of a four-star caliber hotel. Therefore, as an owner, once you are on vacation, you will get the advantage of more four-star services and amenities than you’d get during a typical condominium.
- what’s a condo hotel or condotel?
- What sorts of services and amenities are found in condo hotels?
If you’ll imagine the niceties you’d find in a rich hotel, then you’ll picture a condo hotel. Among the features are often resort-style pools, full-service spas, state-of-the-art fitness centers, fine dining restaurants, concierge services and room service.
In some locations, like Las Vegas , you will find condo hotels with their own casinos, retail areas, and entertainment venues. In places like Orlando, you will find condo hotels with their own water parks and convention facilities.
- what’s the difference between a condo hotel and a standard condominium?
The big difference between a hotel and a condo hotel is that a hotel typically has one owner, either individual or corporate, but a condo hotel is sold off unit by unit. Therefore, a 300-room condo hotel could have as many as 300 unit owners.
- Is it evident to hotel guests whether they’re staying during a condo hotel or a standard hotel?
A hotel guest will likely never know that the hotel has multiple owners because the property is operated a bit like a standard hotel and sometimes under the management of a well known hotel company like Hilton, Hyatt, Starwood, Trump or W. Also, each of the individual condo hotel units will look identical in design and décor to each other, even as they might during a traditional hotel.
- Who typically buys condo hotels?
They’re primarily sold to people that need a dwelling but don’t want to affect the hassles typically related to second home ownership like maintaining the property or finding renters within the off season.
- what’s the demographic of the standard condo hotel buyer?
The spectrum of condo hotel buyers is pretty broad. There are families that need a second range in a vacation destination. There are baby boomers who are at or nearing retirement and need somewhere they will “winter.” There also are many investors who purchase a condo hotel unit with little intention of ever using it; they’re in it for the potential appreciation of the important estate.
- are you able to sleep in a condo hotel?
Condo hotels aren’t typically offered as primary residences. In fact, many of them limit the unit owner’s usage of the condo hotel unit (typically 30-60 days per year) because the unit is predicted and needed within the hotel’s nightly rental program where it are often offered to guests and generate revenue.
- Who gets the cash when your condo hotel is rented out?
The hotel management company splits the rental revenue with the individual condo hotel owner. While the precise percentages vary from property to property, the standard rental split is within the 50%-50% range.
- Who finds hotel guests 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 graceful operation of all of the hotel’s services and amenities.
- What are the benefits / disadvantages of buying a condotel over purchasing typical rental properties?
· Hassle-free ownership; no landlord issues
· Rental revenue to offset some or even all ownership expenses
· an incredible dwelling available to be used whenever you would like
· a true estate investment at a time when other investments could seem less attractive
· Strong likelihood of appreciation
· Pride of ownership –“I own a bit of a Trump”
· Annual income might be adequate to or but annual ownership costs
· Pets are usually not welcome.
· An owner’s condo hotel unit could also be rented when the owner wants thereto , so advance reservations are required to ensure availability.
· The condo hotel unit is subject to an equivalent dips within the market that affect all hotels within the competitive market set: hurricanes, terrorist threats, warm winters up north, price of gas, etc., all of which may affect a unit’s percentage and therefore the amount of revenue it generates.
- Are condo hotel units difficult to finance?
Not at all, but they are doing take 20% down typically, whereas condos are often purchased with less cash down. it is also important to form sure you employ a mortgage broker who has had success in getting condo hotel financing deals done. Many banks still don’t do them, but more and more are becoming involved as condo hotels become more widely available.
- How long have condo hotels been around and where are they located?
Condo hotels are around for several decades, but the large surge of four-star and five-star condo hotels that are making their way across the country, started around year 2000 within the Miami area. The Miami-Fort Lauderdale area still has the foremost condo hotels, but areas like Orlando and Las Vegas are developing condo hotel properties at a good faster rate and can likely surpass South Florida soon. Other up-and-coming areas are places just like the Bahamas, Panama, Dominican Republic , Mexico, Canada and Dubai.
- what proportion do condo hotel units cost?
That’s like asking what proportion a car costs. There are different quality condo hotels. Some require greater amounts of cash than others, obviously.
There are inexpensive condo hotels out there for as little as $100,000. These are typically found in properties that have converted their use from an existing hotel. they’re hotel room-sized, lack kitchen facilities, luxury franchises, and other first-class amenities.
Then there are the four-star or greater properties which will start within the $300,000 to $400,000 range, but can go all the high to $800,000 only for a studio unit. One- and two-bedroom units cost substantially quite a studio. Of course, the studios do come fully furnished and finished, and can be significantly larger in size than a typical bedroom , and should attract guests due to its name like St. Regis, Ritz or W.
- What are typical maintenance costs?
On average about $1.00 to $1.50 per sq. ft., but the range can exceed $2.00 sq. ft. within the most luxurious properties.
- does one buy condo hotel units after they need been built, or are you able to purchase condo hotels in pre-construction?
Unless you’re during a hurry to urge started vacationing otherwise you got to complete a 1031 exchange, it is best to shop for condo hotels in pre-construction as early as possible. That’s when prices are lowest and unit selection is greatest. you’ll likely wait two years or longer before closing on and occupation of your condo hotel unit, but you’ll have locked within the price and can get the advantage of maximum appreciation.
- Is there anything investors should want to understand about condotels?
There is more to purchasing this sort of land than the old phrase, “location, location, location.” While most condo hotels are located in desirable resort and business area locations, what’s most vital may be a good franchise with a robust reservation system.
Also, don’t be fooled by an aggressive rental split. a method or the opposite , the developer of the property will need to staff, maintain and operate the hotel and its services just like the restaurants, bars, spas and pools from his share of the proceeds. If he’s supplying you with a really favorable share of the rental, he’s also more likely to be charging you a better monthly maintenance fee. Of course, this goes both ways. If the upkeep split that’s offered is closer to 50-50, then your maintenance should be more reasonable too.
- Any suggestions to investors in choosing which condo hotel to buy?
Get good advice. meaning you do not want to rely only on the pitch provided by an onsite salesperson at a condo hotel. you would like to speak with a broker who focuses on condo hotels and who knows and understands the whole condo hotel market, not just the facts concerning one property. He or she is going to hear your wants and wishes then offer recommendations on which properties best match your requirements. you will have a chance to comparison shop and consider the pros and cons of every available property.
A good broker are often the difference between your buying a condo hotel which will be problematic and not live up to your expectations or one which will provide you with years of great vacations, good annual revenue and a considerable profit once you sell.
- Does it cost more to use a true estate broker to get a condo hotel than buying a unit on one’s own?
No. With new condo hotel properties, the costs are always set by the developer and are precisely the same whether you purchase directly from an onsite salesperson at the property or employing a broker.
The broker’s commission is usually paid by the developer and is already built into the worth no matter whether an outdoor broker participates within the sale or not. Since a broker’s representation is liberal to buyers, it does add up to enlist their aid and obtain the advantage of their advice before making a sale .
- How can prospective buyers find an honest condo hotel broker?
Ask friends for broker recommendations or search online for “condo hotel broker.” Visit condo hotel broker websites and see if the knowledge they supply seems comprehensive and unbiased. If their website seems to specialise in selling homes or office space, and therefore the condo hotel information appears to be an afterthought, steer clear. Your best bet is to figure with a condo hotel broker who specializes.
- How can buyers study new condo hotel properties approaching the market?
Condo hotel brokers are often good information sources as they often study properties before their release to the overall public. an alternative choice is for them to subscribe a condo hotel newsletter like the one we publish called Condo Hotel Property Alert. we provide it for free of charge on our website http://www.CondoHotelCenter.com and it features a special condo hotel property approaching the market each edition.
Joel Greene is president of Condo Hotel Center which focuses on the sale of condo hotels round the U.S. and therefore the world. His detailed website contains condo hotel property listings, photos and detailed information.