What is a hotel condo?
A hotel condo is a building that is legally a condominium but also has a short-term rental program that operates like a hotel. This entity has a front desk, and the rental program comes with full hotel management service. These buildings are often luxurious high-rises operated by big names like Ritz-Carlton and Hilton. Hotel condos give people the ability to enjoy a vacation home that can be effortlessly turned into a short-term rental investment when they are not using it.
Benefits of Hotel Condos
Luxury Living
Hotel condos can represent the ultimate in luxury living. Often being in great locations with resort style amenities, they can offer the perfect vacation experience. Your hotel condo could be enhanced by amenities such as rooftop pools, gyms, spas, bars, 5-star restaurants, the possibilities are endless. Hotel condos are often operated by the big names like Four Seasons, Ritz-Carlton, Hilton, Rosewood, Clarion, etc. This means more fun for you when you make the trips down, and more money in your pocket if you decide to take advantage of the rental program.
Income Generation
Hotel condos can act as vacation homes which are setup to generate income in your absence. While these purchases aren’t always investment driven, having the ability to rent out your property short-term and hassle-free creates a huge advantage for hotel condo owners. You get to benefit from the reputation, marketing, and operational expertise of the hotel business that is handling the rental portion. All you have to do is pay the management fees. Take a look at the numbers before you buy and make sure your ratio of income to expenses looks acceptable to you. If you are looking to save some money you can always consider renting the unit out yourself if that is something that your contract allows. This would allow you to forgo the high monthly maintenance and hotel rental program fees that are associated with running a resort-style facility.
Flexibility
The flexibility in many hotel condo arrangements can make it an attractive option in a variety of situations. One of the most popular options is to use the property as a vacation home while still profiting from its short-term rental while you aren’t using it. Many hotel condos allow you to rent the unit out on your own if you wish, so you could forgo participating in the rental program and save yourself those fees. You would, of course, have to be more involved in the rentals in this scenario, but it is still often a possibility.
Make sure that you diligently research both your hotel management company and your individual arrangement to understand the rules regarding your ability to short-term rent independently. Find out exactly what you would be missing out on if you forgo the rental program. Try to project – would you make more rental income (even after the fees) by capitalizing on the brand name, sophisticated reservation technology, and operational expertise of the hotel management company? If so, is the extra money worth the added time investment from you which will be necessary to handle the rental portion yourself? You have to evaluate what is right for your situation. Another option is to just use your hotel condo as a vacation home and not rent it out at all. This property is not a timeshare, so you retain true ownership of real estate.
Low Time Investment
By far one of the biggest benefits of hotel condo ownership, if you should chose to participate in the associated rental program, is the worry-free role you are left in as the owner. The on-site management company and operator of the rental program take care of everything associated with the upkeep and rental of your property. As the owner, you never have to deal with tenants, maintenance, scheduling, payment or any of those things which can so easily become a headache for independent short term property renters. They also provide all of the services hotel guests are accustomed to, such as housekeeping, room service, concierge, etc. Hotel condos can truly offer hassle-free vacation home ownership. It’s an investment that you can personally benefit from while not having to invest a lot of time into it otherwise.
If you are thinking about purchasing a hotel condo, the best time to buy is in the early stages of pre-construction. This is when prices are at their lowest, and you still have the best selection of units. As demand increases, selection decreases and prices increase. Many hotel condos sell out before the construction is even complete. If you have questions about hotel condos, in terms of buying, selling, or just in general, reach out to one of our knowledgeable agents. You should make sure you really understand this unique real estate product before making a move.