1. What is a condo hotel or a condotel?
Consider a condo hotel (sometimes also called a condotel or hotel condo) as the purchase of a condominium, even though it 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 in a typical condominium.
2. What types of services and amenities are found in condominium hotels?
If you can imagine the intricacies that you would find in an upscale hotel, then you can imagine a condominium hotel. Features often include complex-style pools, full-service spas, state-of-the-art fitness centers, gourmet restaurants, concierge services, and room service.
In some places, such as Las Vegas, you will find condominium hotels with their own casinos, retail areas and entertainment venues. In places like Orlando, you'll find condominium 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 condominium hotel is that a hotel usually has an owner, individual or business, but a condominium hotel is sold unit by unit. Therefore, a 300-room condo hotel could have up to 300 unit owners.
4. Is it obvious to hotel guests whether they are staying in a condominium hotel or in a traditional hotel?
A hotel guest will probably never know that the hotel has multiple owners, as the property is run as a traditional hotel and often under the management of a well-known hotel company like Hilton, Hyatt, Starwood, Trump or W. In addition, each of the individual condo-hotel units will have a design and decoration identical to each other, just like in a traditional hotel.
5. Who generally buys condominiums?
They are mainly sold to people who want a vacation home but don't want to face the hassles generally associated with owning a second home, such as servicing the property or looking for tenants out of season .
6. What is the demographic of the typical buyer of a condominium hotel?
The spectrum of buyers of condominium hotels is quite wide. There are families who want a second home in a vacation destination. There are baby boomers who are retired or nearing the end and want a place where they can "winter". There are also many investors who buy a condominium hotel unit with little intention of using it; they are there for the potential appreciation of real estate.
7. Can you live in a condo hotel?
Condominium hotels are generally not offered as primary residences. In fact, many of them limit the owner's use of the hotel co-ownership unit (usually 30 to 60 days per year), since the unit is expected and necessary in the hotel's night rental program, where it can be offered to customers and generate income.
8. Who receives the money when your condo-hotel is rented?
The hotel management company shares the rental income with the individual owner of the condominium hotel. While the exact percentages vary from property to property, the typical rental distribution is between 50% and 50%.
9. Who finds hotel guests, then cleans and maintains the condominium hotel units?
The hotel management company markets the property and reserves the hotel guests. He also maintains the unit and ensures the proper functioning of all the services and equipment of the hotel.
10. What are the advantages / disadvantages of buying a condotel compared to buying typical rental properties?
· Hassle-free property; no owner issues
· Rental income to offset some or all of the property expenses
· A fantastic vacation home available for use whenever you want
· A real estate investment at a time when other investments may seem less attractive
· High probability of appreciation
· Pride of ownership – "I own a piece of Trump"
The disadvantages include:
· Annual cash flows may be equal to or less than annual costs of ownership
· Pets are generally not welcome.
· An owner's condominium hotel unit can be rented when the owner wishes, so advance reservations are required to ensure availability.
· The condo hotel unit is subject to the same market declines 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 occupancy rate of a unit and the amount of income it generates.
11. Are hotel condominium units difficult to finance?
Not at all, but they usually take 20% off, while condos can be bought with less cash. It is also important to make sure you use a mortgage broker who has successfully entered into hotel condominium financing agreements. Many banks still don't, but more and more are getting involved as condominium hotels become more widely available.
12. How long have condos-hotels been in existence and where are they located?
Condominium apartments have been around for several decades, but the huge spike in four- and five-star condominium hotels that crossed the country began around the year 2000 in the Miami area. The Miami-Fort Lauderdale area still has the most condominium hotels, but regions like Orlando and Las Vegas are developing condominium properties at an even faster rate and are likely to overtake South Florida soon. Other emerging regions are places like the Bahamas, Panama, the Dominican Republic, Mexico, Canada and Dubai.
13. How much do condominium apartments cost?
It's like asking how much a car costs. There are various quality condominium hotels. Some people need more money than others, obviously.
There are inexpensive condominium apartments for as little as $ 100,000. These are usually found in properties that have converted their use from an existing hotel. They are the size of a hotel room, lack kitchen facilities, luxury franchises and other first class amenities.
Then there are the four-star or higher properties that can start between $ 300,000 and $ 400,000, but can go up to $ 800,000 just for a studio unit. One- and two-bedroom units cost much more than a studio. Of course, the studios are fully furnished and finished, and will be much larger than a typical hotel room, and can attract customers due to its name like St. Regis, Ritz or W.
14. What are the typical maintenance costs?
Average 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 condominium units after construction or can you buy condominiums under pre-construction?
Unless you are in a rush to start your vacation or need a 1031 exchange, it is best to buy condominium apartments in pre-construction as soon as possible. This is when the prices are the lowest and the selection of units is the most important. You will likely have to wait two years or more before closing and taking possession of your condominium hotel unit, but you will have locked in the price and enjoy maximum appreciation.
16. Is there anything else investors should want to know about condotels?
Buying this type of property is not just the old phrase "location, location, location". While most condominium hotels are located in desirable resorts and business areas, what is most important, it is a good franchise with a solid reservation system.
Also, don't be fooled by an aggressive distribution of rents. Either way, the property developer will need to endow, maintain and operate the hotel and its services like restaurants, bars, spas, and pools from its share of the product. If it gives you a very favorable share of the rental, it is also more likely to charge you a higher monthly maintenance fee. Of course, it goes both ways. If the proposed maintenance split is closer to 50-50, your maintenance should also be more reasonable.
17. Any suggestions to investors for choosing which condo-hotel to buy?
Get good advice. This means that you don't want to rely solely on the location provided by an on-site seller in a condominium hotel. You want to speak to a condo hotel broker who knows and understands the entire condominium market, not just the facts about a single property. He or she will listen to your wants and needs, then suggest properties that best suit your needs. You will have the opportunity to compare the store and consider the pros and cons of each available property.
A good broker can mean the difference between buying a condo hotel that will be problematic and won't meet your expectations or one that will give you years of great vacation, good annual income and substantial profit. when you sell.
18. Is it more expensive to use a real estate broker to buy a condominium hotel than to buy accommodation alone?
No. With the new condo-hotel properties, prices are still set by the developer and are exactly the same whether you buy directly from an on-site seller at the property or using a broker.
The broker's commission is always paid by the developer and is already included in the price, whether or not an outside broker participates in the sale. Since the representation of a broker is free for buyers, it makes sense to seek their help and benefit from their advice before making a purchase.
19. How can potential buyers find a good condominium hotel broker?
Ask your friends for broker recommendations or search online for “condo hotel broker”. Visit the condominium hotel broker websites and see if the information they provide seems complete and unbiased. If their website seems to be focused on selling homes or office space and the information on condominiums seems to be an afterthought, avoid things. Your best bet is to work with a specialized condominium hotel broker.
20. How can buyers find out about new condominium properties on the market?
Condominium hotel brokers can be good sources 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 Condo Hotel Property Alert. We offer it for free on our website http://www.CondoHotelCenter.com and it offers a different co-owned hotel property that hits the market with each edition.