1. What is a condo hotel or condotel?
Think of a condo hotel (also sometimes called a condotel or hotel condo) as buying a condo, albeit one that is part of a four-star caliber hotel. Therefore, as a homeowner, when you are on vacation, you will get the benefit of more four-star services and amenities than you would in a typical condo.
2. What type of services and amenities are found in the condo hotels?
If you can imagine the subtleties that you will find in a luxury hotel, then you can imagine a condo hotel. Features often include resort-style pools, full-service spas, state-of-the-art gyms, fine dining restaurants, concierge services, and room service.
In some places, like Las Vegas, you will find condos with their own casinos, shopping areas, and entertainment venues. In places like Orlando, you’ll find condos 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 a hotel generally has one owner, either individual or corporate, but a condo hotel is sold unit by unit. Therefore, a 300-room condo could have up to 300 owners.
4. Is it obvious to hotel guests whether they are staying in a condo hotel or a traditional hotel?
A hotel guest will likely never know that the hotel has multiple owners because the property is operated as a traditional hotel and is often under the management of a well-known hotel company such as Hilton, Hyatt, Starwood, Trump, or W. las Individual units of the condominium hotel will look identical in design and decor to all the others, just as they would in a traditional hotel.
5. Who usually buys condos?
They are primarily sold to people who want a vacation home but don’t want to deal with the hassles typically associated with second home ownership, such as property maintenance or out-of-season tenant hunting.
6. What is the demographic of the typical condo buyer?
The spectrum of condo hotel buyers is quite wide. There are families who want a second home in a vacation destination. There are baby boomers who are about to retire and want a place where they can “spend the winter.” There are also many investors who buy a condo hotel unit with little intention of using it; they are in it for the potential real estate appreciation.
7. Can you live in a condominium hotel?
Condominium hotels are not normally offered as primary residences. In fact, many of them limit the use of the condo hotel unit by the unit owner (usually 30 to 60 days per year) because the unit is expected and needed in the hotel’s overnight rental program, where it can be offered to guests and generate income.
8. Who gets the money when your condo is rented?
The hotel management company splits the rental income with the individual condo hotel owner. While the exact percentages vary from property to property, the typical rental split is in the 50-50% range.
9. Who finds the hotel guests and then cleans and maintains the condo hotel units?
The hotel management company markets the property and reserves to hotel guests. He also maintains the unit and ensures the proper functioning of all hotel services and amenities.
10. What are the advantages / disadvantages of buying a condotel over buying typical rental properties?
· Hassle-free ownership; no problems with the owner
Rental income to offset some or perhaps all of the property expenses
A fantastic vacation home available to use whenever you want
A real estate investment at a time when other investments may seem less attractive
Strong likelihood of appreciation
· Pride of ownership: “I own a part of a Trump”
The annual cash flow could be equal to or less than the annual costs of ownership.
Pets are generally not welcome.
The owner’s condo hotel unit can be rented whenever the owner wishes, so advance reservations are required to ensure availability.
The condo hotel unit is subject to the same market downturns that affect all hotels in the competitive market: hurricanes, terrorist threats, warm winters in the north, gas prices, etc., all of which can affect the rate. occupancy of a unit and the amount of income it generates.
11. Are condo hotel units difficult to finance?
Not at all, but they generally cut 20%, whereas condos can be purchased with less cash. It’s also important to make sure you use a mortgage broker who has been successful in making condo hotel financing deals. Many banks don’t make them yet, but more and 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 great wave of four- and five-star condo hotels that have made their way across the country began around 2000 in the Miami area. The Miami-Fort Lauderdale area still has the most condo hotels, but areas like Orlando and Las Vegas are developing condo hotel properties at an even faster rate and will likely overtake South Florida soon. Other emerging areas are places like the Bahamas, Panama, the Dominican Republic, Mexico, Canada, and Dubai.
13. How much do condominium hotel units cost?
That’s like asking how much a car costs. There are condo hotels of different qualities. Some require larger amounts of money than others, obviously.
There are inexpensive condo hotels for as low as $ 100,000. They are usually found in properties that have converted their use of an existing hotel. They are the size of a hotel room, lacking in kitchen facilities, luxury franchises, and other first-class amenities.
Then there are the four-star or higher properties that can start in the $ 300,000 to $ 400,000 range, but can go as high as $ 800,000 for just one unit of study. One- and two-bedroom units cost substantially more than a studio. Of course, the studios come fully furnished and finished, and will be significantly larger than a typical hotel room, and may attract guests due to their name such as St. Regis, Ritz, or W.
14. What are typical maintenance costs?
On average, around $ 1.00 to $ 1.50 per square meter. ft., but the range may exceed $ 2.00 sq. foot in the most luxurious properties.
15. Do you buy condo hotel units after they have been built, or can you buy pre-construction condo hotels?
Unless you’re in a rush to start your vacation or need to complete a 1031 exchange, it’s best to buy pre-construction condos as soon as possible. That’s when prices are lowest and unit selection is greatest. You will likely wait two years or more before closing and taking possession of your condo hotel unit, but you will have fixed the price and will reap the benefit of maximum appreciation.
16. Is there anything else investors need to know about condotels?
Buying this type of real estate involves more than the old phrase “location, location, location.” While most condo hotels are located in desirable locations in resorts and commercial areas, the most important thing is a good franchise with a strong reservation system.
Also, don’t be fooled by an aggressive rental division. One way or another, the property developer will have to staff, maintain and operate the hotel and its services such as restaurants, bars, spas and swimming pools with their share of the proceeds. If you give him a very favorable portion of the rent, he is also more likely to charge you a higher monthly maintenance fee. Of course, this goes both ways. If the maintenance division offered is closer to 50-50, then your maintenance should also be more reasonable.
17. Any suggestions for investors when choosing which condo to buy?
Get good advice. That means you don’t want to rely solely on presentation provided by an on-site salesperson in a condo. You want to speak with a broker who specializes in condos and who knows and understands the entire condo market, not just the facts related to a single property. He or she will listen to your wants and needs and then offer recommendations on which properties best suit your needs. You will have the opportunity to compare prices and consider the pros and cons of each available property.
A good broker can make the difference between buying a condo hotel that will be problematic and will not live up to your expectations or one that will provide you with years of great vacations, good yearly income, and a substantial profit when you sell.
18. Does it cost more to use a real estate broker to buy a condo hotel than to buy a unit on your own?
No. With new condo hotel properties, prices are always set by the developer and are exactly the same, whether you buy directly from a seller on the property site or through a broker.
The broker commission is always paid by the developer and is already included in the price, regardless of whether an external broker participates in the sale or not. Since the representation of a broker is free to buyers, it makes sense to ask for their help and get the benefit of their advice before making a purchase.
19. How can prospective buyers find a good condo hotel broker?
Ask your friends for broker recommendations or search online for “condo hotel broker.” Visit the condo hotel broker websites and see if the information they provide seems complete and unbiased. If your website seems to focus on the sale of homes or office space, and the condo hotel information seems like an afterthought, steer clear. Your best option is to work with a condo broker who specializes.
20. How can buyers find out about new condo hotel properties coming on the market?
Condo hotel brokers can be a good source of information, as they often learn about properties before they are released to the general public. Another option is for them to subscribe to a condo hotel newsletter like the one we publish called the Condo Hotel Property Alert. We offer it free of charge on our website http://www.CondoHotelCenter.com and it has a different condo property that goes on the market in each edition.