CONDO HOTELS CROPPING UP AROUND U.S. & THE WORLD
These Hassle-free Vacation Homes Offer Benefits to Communities
and Individual Owners
There is a new trend taking hold in many major resort areas. Up
and down the beaches, the old mom-and-pop hotels and motels are
closing as residential property surges in value and luxury
condos take their place. But a new hybrid product, condo hotels,
could help satisfy both the profit motive and the need for hotel
unit inventory.
Owners Receive Rent Revenue
A growing number of large, high-rise properties in Florida, Las
Vegas and across the country are part of the condo hotel wave in
which each unit is a condominium owned by an individual buyer
who uses it part time as a vacation home. When owners are not
using their condo units, the hotel's management company rents
them to outside guests.
Cities that thrive on tourism need hotel rooms for their
visitors. Condo hotels can help preserve the number of available
rooms. The hotel management encourages owners to participate in
the rental program rather than boarding up their condos for much
of the year. Owners receive a portion of the rental income,
usually around 50 percent, and have the comfort of knowing that
someone else is responsible for the property's care in their
absence.
Hassle-free Vacation Homes
For the individual investor, condo hotels offer an opportunity
to own a vacation home in a popular destination and have access
to a hotel's vast amenities from spas, pools and fitness centers
to fine-dining restaurants and concierge services. The condo
owners get all the services of a four-star or five-star hotel,
and none of the hassles of second home ownership. The hotel's
management company takes care of all upkeep as well as finding
hotel guests.
Ritz-Carlton, Trump, Starwood, Hilton & Hyatt
Part of the success of individual condo hotels is due to the
brands with which they're associated. And the names getting into
the business these days are indeed impressive. They include
Ritz-Carlton, Trump International, Starwood, Hilton and Hyatt,
to name a few. Those names guarantee quality and professional
management. Plus they bring sophisticated reservation systems
and marketing to help ensure that owners' units maintain high
occupancy rates and generate substantial revenue.
Rent Revenue Offsets Ownership Expenses
Prices for luxury condo hotel units range from $300,000 to well
over $1,000,000. Like a traditional condominium, there's a condo
association, property taxes and a monthly condo fee. The revenue
a condo hotel unit generates helps to offset these expenses.
Condo Hotels Often Appreciate in Value
Another benefit for condo hotel owners is potential
appreciation. Owners stand to gain financially if values go up.
Most properties sell the majority of their condo hotel units in
the pre-construction phase. Those buyers who get in early when
prices are at their lowest and unit selection greatest are ones
most likely to see the greatest appreciation.
Condo Hotel Concept Catching On
The latest reports show that over 90,000 condo hotel rooms are
in the pipeline. The condo hotel boom is not isolated to the
popular cities in Florida like Miami Beach, Fort Lauderdale,
Palm Beach and Orlando. Condo hotels are sprouting up in many
other major destinations including Las Vegas, Myrtle Beach and
the Bahamas.
Major metropolitan areas like Chicago, Boston, New York and
Toronto are getting condo hotels as well. So are some resort
towns that are near to major cities such as the Wisconsin Dells
which is within driving range of Chicago and Minneapolis.
Even some exotic locations are joining the trend. In Dubai, one
of the United Arab Emirates, construction will soon begin on at
least four large, five-star condo hotels. Various Caribbean and
European developers are exploring the concept too. Given the
success of recent condo hotel developments, many more are sure
to follow.
For more information on condo hotels including listings of
available properties, visit www.CondoHotelCenter.com.