Condo hotels are one of the latest and most popular forms of real estate investment. These are essentially properties located in high quality hotels and can lead to an incredible ROI. Once a condo is purchased, it can be used whenever the owner likes and when it is not in use, it can simply be placed in the hotel’s special rental program; where the owner enjoy a percentage of the revenue. While such an investment can be very expensive in certain locations, wealthy vacationers will queue up to rent out the property. Below, we look at a few things to consider when contemplating condo hotel investment.
Please bear in mind that a condo hotel is not a traditional ‘second home’. These are incredibly luxurious condos in some of the nation’s premier hotels. These properties have amenities, such as a maid service and concierge, plus some of these condos are on the market for $1 million or more. So, can you afford it and are you ready to become a big player on the luxury real estate market?
Regardless of how well furnished a condo hotel property is, your ROI depends entirely on where it is located. For example, condos in Las Vegas, Miami, Dallas, and Houston will be highly sought after, while areas not known for attracting tourists will be overlooked. Make sure the condo location offers something extra, such as an ocean view or access to a private golf club and is situated close to an airport.
Although it could be argued that a condo hotel is a luxury property that should be purchased for personal enjoyment, you don’t want to lose money on an investment that could quite easily yield a handsome profit. Look at the surrounding areas and rate of appreciation in the region for similar buildings. Find out if the condo has a lot of competition and whether or not it has been in demand since it came on the market. Contact a realtor who is familiar with both the area and the condo hotel of interest for additional information and advice.
As you are ostensibly buying the condo hotel for yourself, you need to determine if it has enough space and bedrooms for your family or other guests. Bear in mind that some condo hotels do not have a kitchen, so factor this into your plans. Pay particular attention to the view and quality of furnishings. If it isn’t good enough for your tastes, what makes you think other tenants will pay a small fortune to stay there?
While having a fabulous place to stay is a very attractive proposition for those on vacation, it means nothing if the area has subpar amenities. High quality hotels and resorts should have a golf course, health club, spa, fine dining, and a mall either on the premises or in close proximity. Don’t waste your money on any condo hotel that doesn’t offer the ultimate in convenience.
As well as being a wonderful place to go on vacation, a condo hotel offers a genuine opportunity to step into the world of luxury real estate and actually make a profit, rather than allowing the costs to eat into your bank balance.
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