1. What is a hotel or condotel condo?
Think of a condo hotel (sometimes called a condotel or a condo hotel) as buying a condominium, though one that is part of a four-star caliber hotel. Therefore, as an owner, when you are on vacation, you will benefit from more four-star services and amenities than you would for a typical building.
2. What types of services and amenities are available in condo hotels?
If you can imagine the beauties you can find in an upscale hotel, then you can photograph a condo hotel. Features include often resort-style pools, full-service baths, better fitness centers, great dining restaurants, concierge services, and room service.
In some places, like Las Vegas, you will find condo hotels with their casinos, retail areas and entertainment venues. In places like Orlando, you will find condo hotels with their water parks and congress facilities.
3. What's the difference between a condo hotel and a traditional condominium?
The big difference between a hotel and a condo hotel is that a hotel usually has an owner, individual or corporate, but a condo hotel is sold unit by unit. Therefore, a 300 room condo hotel can have 300 unit owners.
4. Is it visible to hotel guests whether they are staying in a condo hotel or a traditional hotel?
A hotel guest will likely never realize that the hotel has multiple owners because the property is operated like a traditional hotel and often under the management of a well-known hotel company such as Hilton, Hyatt, Starwood, Trump or W. Also, each of the individual condo hotel units will look identical in design and decor to each other, as they would in a traditional hotel.
5. Who usually buys condo hotels?
They are mainly sold to people who want a holiday home but do not want to deal with problems usually associated with second home ownership, such as property maintenance or finding tenants in the off-season.
6. What is the demographic of the typical condo hotel buyer?
The range 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 retired or close to retirement and want somewhere they can "winter." There are also plenty of investors buying a condo hotel unit with little intention of ever using it; they are in it for possible real estate valuation.
7. Can you live in a condo hotel?
Condo hotels are not usually offered as main residences. In fact, many limit the use of the condo hotel unit owner (usually 30-60 days a year) because the unit is hosted and needed at the hotel rental night program, where it can be provided to friends and generates income.
8. Who gets the money when renting your hotel?
The hotel management company shares 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 hotel guests and then cleans and maintains condo hotel units?
The hotel management company markets the hotel properties and guest books. It also maintains the unit and ensures the smooth operation of all hotel services and amenities.
10. What are the advantages / disadvantages of buying a condotel over buying typical rental properties?
The advantages include:
· Trouble-free ownership; no owner issues
· Rental income to offset some or possibly all ownership costs
· A fantastic holiday home available to use whenever you want
· A real estate investment at a time when other investments may seem less attractive
· Strong evaluation opportunity
· Pride of Ownership – "I Own Part of a Trump"
· Annual cash flow may be equal to or less than annual ownership costs
· Pets are usually not welcome.
· A condo hotel unit owner can be rented when the owner wants, so prior reservations are required to guarantee availability.
· The condo hotel unit is subject to the same market downturns that affect all hotels in the competitive market group: hurricanes, terrorist threats, warm northern winters, gas prices, etc., all of which can affect one unit & # 39; Occupancy rate and amount of revenue it generates.
11. Are condo hotel units difficult to finance?
Not at all, but they get 20% down typically, while condos can be purchased with less money. It is also important to make sure that you use a mortgage broker who has been successful in obtaining condo financing hotel deals. Many banks are still not making them, but more and more are getting involved as condo hotels become more available.
12. How long have condo hotels been and where are they?
Condo hotels have been around for several decades, but the huge overhaul of four-star and five-star condo hotels running across the country began around 2000 in the Miami area. The Miami-Fort Lauderdale area still has the most convenient hotels, but areas like Orlando and Las Vegas are developing condo hotel properties at an even faster rate and are likely to surpass South Florida soon. Other upcoming areas are places like the Bahamas, Panama, Dominican Republic, Mexico, Canada and Dubai.
13. How much do condo hotel units cost?
This is like asking how much a car costs. There are various condo quality hotels. Some require larger amounts of money than others, obviously.
There are cheap condo hotels out there for as little as $ 100,000. These are usually found on properties that have transformed their use of an existing hotel. They are sized hotel rooms, lack kitchen facilities, luxury franchises and other first class amenities.
Then there are four-star or larger properties that can start in the range of $ 300,000 to $ 400,000 but can go up to $ 800,000 for a single studio unit. One- and two-bedroom units cost significantly more than a studio. Of course, the studios become fully furnished and finished, and will be significantly larger in size than a typical hotel room and can attract guests because of its name as St. Regis, Ritz or W.
14. What are the typical maintenance costs?
On average about $ 1.00 to $ 1.50 per sq ft, but the range can exceed $ 2.00 a square on the most luxurious properties.
15. Do you buy condo hotel units after they are built, or can you buy condo hotels in pre-construction?
Unless you are in a hurry to start the holidays or need to complete a 1031 exchange, it is best to buy condo hotels in pre-construction as soon as possible. This & # 39; when prices are lower and the choice of units is greater. You will probably wait two years or more before closing and owning your condo hotel unit, but you will have closed the price and received the maximum rating benefit.
16. Is there anything else that investors should want to know about condoms?
There is more to buying this type of real estate than the old phrase, "location, location, location." While most condo hotels are located in the desired resorts and business areas, what is most important is a good franchise with a strong booking system.
Also, don't be fooled by an aggressive rental division. One way or another, the property developer will have to staff, maintain and administer his hotel and services such as restaurants, bars, baths and swimming pools from his share of the proceeds. If he gives you a very favorable share 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 breakdown offered is closer to 50-50, then your maintenance should also be more reasonable.
17. Any suggestions for investors in choosing which condo hotel to buy?
Get good advice. This means you don't just want to rely on the domain provided by an on-site vendor at a condo hotel. You want to talk to a broker who specializes in condo hotels and who knows and understands the entire condo hotel market, not just the facts surrounding a single property. He or she will listen to your wishes and needs and then provide recommendations on which properties best suit your requirements. You will have an opportunity to compare the store and consider the pros and cons of each property available.
A good broker can be the difference between buying a condo hotel that will be problematic and will not meet your expectations or one that will provide you with years of great vacation, good income. annual 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 separate unit?
No. With new condo hotel properties, the prices are always set by the developer and are exactly the same, whether you buy directly from an on-site seller at the property or use a broker.
The broker commission is always paid by the developer and is already included in the price, whether or not an external broker participates in the sale. Since a broker and 39's representation is free to shoppers, it makes sense to register their help and take advantage of their advice before making a purchase.
19. How can prospective buyers find a good condo hotel broker?
Ask friends for broker recommendations or search online for "condo hotel broker." Visit condo hotel broker websites and see if the information they provide seems comprehensive and impartial. If their website seems to focus on selling homes or office spaces, and condo hotel information seems to be a consequence, stay clear. Your best bet is to work with a condo hotel broker who specializes.
20. How can buyers find out about new condo hotel properties coming to market?
Condo hotel agents can be good sources of information as they often learn about properties before publishing them to the general public. Another option is to subscribe to a condo hotel newspaper such as the one we publish called Condo Hotel Property Alert. We offer it for free on our website http://www.CondoHotelCenter.com and it features a different condo hotel property that comes out in every edition.