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N MIAMI CONDO NEWS — All About Condo Living in the Magic City — Edited by Heinz Dinter, PhD |
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What are condo hotels? (2006-12-24)
Condo Hotels first started appearing in places like Miami Beach and Ft. Lauderdale. They have increased tremendously in popularity and can now be found in places like Belize and Dubai. Most condo hotel properties are owned by names you would recognize. Companies like Hilton, Starwood, Ritz-Carlton, Bulgari, and Trump see the condo hotel trend as a solid business venture. With names like that, if you choose to invest in a condo hotel, you’ll know you’re dealing with well-respected, successful businesses. And when you purchase a condominium in a condo hotel, you’re not just buying vacation property, you’re investing in the hotel business. Here’s how condo hotels works:
The benefit of this type of arrangement is that you get a luxury condominium in a luxury resort, but don’t have to worry about maintenance and upkeep when you’re not there. In addition, because the hotel will rent out your condo, your vacation home becomes an investment property. Because hotel management handles marketing and promotion, you don’t have to, and you get the added benefit of having your condo marketed as part of a well-known and respected luxury hotel. Imagine the marketing power behind names such as Ritz-Carlton and Trump! Having your vacation condo promoted under a name like that gives you unparalleled exposure. In addition, property values for this type of investment having been steadily rising due to supply and demand. Especially for those who buy a condo during either the pre-construction or construction phase. Some have been known to increase in value by as much as 16% in the first year. Keep in mind, there’s no guarantee how often or for how long your condo will be rented while you’re gone. Ideally, you could offset the costs of everything including the mortgage, but be prepared for times when that doesn’t happen. Remember that this is primarily a vacation home and potential long-term investment, not a short-term, quick money maker. Another benefit of investing in a condo hotel, rather than simply purchasing a vacation home, is that when you stay in your condo, you get all the amenities of a four or five star hotel! Most condo hotels, because they are built and marketed as resorts, have fitness rooms, spas, fine dining restaurants, and pools. Some will even have valet and concierge services, complimentary continental breakfasts, boutiques, and many will be oceanfront properties. How is a condo hotel this different from a time-share? When you purchase a time-share, you’re not purchasing the property, just time at the property. You have to use the property and it’s facilities during the same time every year, unless you’re able to trade with someone else. This can cause challenges when trying to plan a family vacation. There’s no guarantee that you’ll have the same two weeks free next year that you have this year. And what if you want to go more than once year? Then you have to buy several blocks of time. In some instances, a time-share gives you a specific week or two, but allows you to choose between several properties. You’re still limited by the dates you purchased, and may not be able to find a desirable location that has your specific dates available. With a hotel condominium, you own the condo, which means that it’s yours to use as often as you’d like. No trading dates, or locations. You come and go as you please. While you do need to give the hotel advance notice so they won’t rent your condo on the week you’re planning to be there, as the owner, you get first pick. In addition, hotel condominiums are in such demand that they’re far easier to sell than a time-share. Overall, if you’re looking for a second or vacation home, a condo hotel is well worth looking into. Not only does it give you the chance to enjoy vacationing at a luxury resort, but you’ve got a full-time management staff that will look after things when you’re not there. Because most condo hotels are luxury hotels, you get outstanding amenities and spectacular views. Add to that the fact that you can generate a little money by putting your condo in the rental program, and you’ve got a pretty good deal. As with any major purchase, it’s wise to do some research before making any final decisions. Weigh the pros and cons carefully and be sure you’re not purchasing the condo with grandiose ideas of making money hand-over-fist. Yes, it is potentially a good investment, as is most real estate, but be sure your expectations are realistic. Source: www.foiegrasdefrancia.com
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