Thinking of Buying a Condo Hotel Here Are 20 Things You Need to Know!
==== ====A complete hotel search engine website, 247CheapestHotels.com, which searches over 230,000hotel properties. This same site also searches for airline and car rental prices.www.247CheapestHotels.com==== ====1. What is a condo hotel or condotel?Think of a condo hotel (also sometimes called a condotel or hotel condo) as buying acondominium, although one that is part of a four-star caliber hotel. Therefore, as an owner, whenyou are on vacation, youll get the benefit of more four-star services and amenities than youd getin a typical condominium.2. What types of services and amenities are found in condo hotels?If you can imagine the niceties youd find in an upscale hotel, then you can 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, youll find condo hotels with their own casinos, retail areas, andentertainment venues. In places like Orlando, youll find condo hotels with their own water parksand 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 typically has one owner, eitherindividual or corporate, but a condo hotel is sold off unit by unit. Therefore, a 300-room condohotel could have as many as 300 unit owners.4. Is it evident to hotel guests whether theyre 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 isoperated just like a traditional hotel and often under the management of a well-known hotelcompany like Hilton, Hyatt, Starwood, Trump or W. Also, each of the individual condo hotel unitswill look identical in design and décor to every other, just as they would in a traditionalhotel.5. Who typically buys condo hotels?Theyre primarily sold to people who want a vacation home but do not want to deal with thehassles typically associated with second home ownership such as maintaining the property orfinding renters in the off season.6. What is the demographic of the typical condo hotel buyer?
The spectrum of condo hotel buyers is pretty broad. There are families that want a second homein a vacation destination. There are baby boomers who are at or nearing retirement and wantsomewhere they can "winter." There are also plenty of investors who purchase a condo hotel unitwith little intention of ever using it; theyre in it for the potential appreciation of the real estate.7. Can you live in a condo hotel?Condo hotels are not typically offered as primary residences. In fact, many of them limit the unitowners usage of the condo hotel unit (typically 30-60 days per year) because the unit is expectedand needed in the hotels nightly rental program where it can be offered to guests and generaterevenue.8. Who gets the money when your condo hotel is rented out?The hotel management company splits the rental revenue 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 the condo hotel units?The hotel management company markets the property and books hotel guests. It also maintainsthe unit and ensures the smooth operation of all of the hotels services and amenities.10. What are the advantages / disadvantages of purchasing a condotel over purchasing typicalrental properties?Advantages include:· Hassle-free ownership; no landlord issues· Rental revenue to offset some or maybe all ownership 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· Strong likelihood of appreciation· Pride of ownership --"I own a piece of a Trump"Disadvantages include:· Annual cash flow could be equal to or less than annual ownership costs· Pets are usually not welcome.· An owners condo hotel unit may be rented when the owner wants to it, so advance
reservations are required to guarantee availability.· The condo hotel unit is subject to the same dips in the market that affect all hotels in thecompetitive market set: hurricanes, terrorist threats, warm winters up north, price of gas, etc., all ofwhich can affect a units occupancy rate and the amount of revenue it generates.11. Are condo hotel units difficult to finance?Not at all, but they do take 20% down typically, whereas condos can be purchased with less cashdown. Its also important to make sure you use a mortgage broker who has had success in gettingcondo hotel financing deals done. Many banks still do not do them, but more and more are gettinginvolved as condo hotels become more widely 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 surge of four-star and five-starcondo hotels that have been making their way across the country, started around year 2000 in theMiami area. The Miami-Fort Lauderdale area still has the most condo hotels, but areas likeOrlando and Las Vegas are developing condo hotel properties at an even faster rate and will likelysurpass South Florida soon. Other up-and-coming areas are places like the Bahamas, Panama,Dominican Republic, Mexico, Canada and Dubai.13. How much do condo hotel units cost?Thats like asking how much a car costs. There are different quality condo hotels. Some requiregreater amounts of money than others, obviously.There are inexpensive condo hotels out there for as little as $100,000. These are typically foundin properties that have converted their use from an existing hotel. They are hotel room-sized, lackkitchen facilities, luxury franchises, and other first-class amenities.Then there are the four-star or greater properties that may start in the $300,000 to $400,000range, but can go all the way up to $800,000 just for a studio unit. One- and two-bedroom unitscost substantially more than a studio. Of course, the studios do come fully furnished and finished,and will be significantly larger in size than a typical hotel room, and may attract guests because ofits name like St. Regis, Ritz or W.14. 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. in the mostluxurious properties.15. Do you buy condo hotel units after they have been built, or can you purchase condo hotels inpre-construction?Unless you are in a hurry to get started vacationing or you need to complete a 1031 exchange, itsbest to buy condo hotels in pre-construction as early as possible. Thats when prices are lowestand unit selection is greatest. You will likely wait two years or longer before closing on and taking
possession of your condo hotel unit, but you will have locked in the price and will get the benefit ofmaximum appreciation.16. Is there anything else investors should want to know about condotels?There is more to buying this type of real estate than the old phrase, "location, location, location."While most condo hotels are located in desirable resort and business area locations, what is mostimportant is a good franchise with a strong reservation system.Also, do not be fooled by an aggressive rental split. One way or the other, the developer of theproperty will have to staff, maintain and operate the hotel and its services like the restaurants,bars, spas and pools from his share of the proceeds. If hes giving you a very favorable share ofthe rental, hes also more likely to be charging you a higher monthly maintenance fee. Of course,this goes both ways. If the maintenance split that is offered is closer to 50-50, then yourmaintenance should be more reasonable too.17. Any suggestions to investors in choosing which condo hotel to buy?Get good advice. That means you dont want to rely only on the pitch provided by an onsitesalesperson at a condo hotel. You want to talk with a broker who specializes in condo hotels andwho knows and understands the entire condo hotel market, not just the facts pertaining to a singleproperty. He or she will listen to your wants and needs and then offer recommendations as towhich properties best match your requirements. Youll have an opportunity to comparison shopand consider the pros and cons of each available property.A good broker can be the difference between your buying a condo hotel that will be problematicand not live up to your expectations or one that will provide you with years of great vacations,good annual revenue and a substantial profit when you sell.18. Does it cost more to use a real estate broker to purchase a condo hotel than buying a unit onones own?No. With new condo hotel properties, the prices are always set by the developer and are exactlythe same whether you buy directly from an onsite salesperson at the property or using a broker.The brokers commission is always paid by the developer and is already built into the priceregardless of whether an outside broker participates in the sale or not. Since a brokersrepresentation is free to buyers, it does make sense to enlist their aid and get the benefit of theiradvice 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 condohotel broker websites and see if the information they provide seems comprehensive and unbiased.If their website seems to focus on selling homes or office space, and the condo hotel informationappears to be an afterthought, steer clear. Your best bet is to work with a condo hotel broker whospecializes.
20. How can buyers learn about new condo hotel properties coming on the market?Condo hotel brokers can be good information sources as they often learn about properties prior totheir release to the general public. Another option is for them to subscribe to a condo hotelnewsletter such as the one we publish called Condo Hotel Property Alert. We offer it for free onour website http://www.CondoHotelCenter.com and it features a different condo hotel propertycoming on the market each edition.Joel Greene is president of Condo Hotel Center which specializes in the sale of condo hotelsaround the U.S. and the world. His detailed website contains condo hotel property listings, photosand detailed information. Visit http://www.CondoHotelCenter.com andhttp://www.CondoHotelsDubai.com. Be sure to sign up for his Condo Hotel Property Alertnewsletter to be notified when new condo hotels come on the market.Article Source:http://EzineArticles.com/?expert=Joel_Greene==== ====A complete hotel search engine website, 247CheapestHotels.com, which searches over 230,000hotel properties. This same site also searches for airline and car rental prices.www.247CheapestHotels.com==== ====