What is a Hotel/Condo?

June 21st, 2012

Description

A Condo-hotel is a real estate product that combines the flexibility of ownership with the branding of some of the world’s top hotels/resorts.

Locations
In South Florida, the Condo-hotel concept began in places like Miami-Beach and Fort Lauderdale. But this concept is spreading through many other parts of Florida such as Orlando, Naples, Fort Myers and the Tampa-Clearwater area. Condo-hotel are becoming more and more prevalent in cities that get more traffic from travelers. In certain smaller cities, developers instead build hotels with residential units.

Benefits
Unlike simple converted condominiums — which owners can use as they please — hotel-condo units are fully furnished units that can be used by their owners for up to 180 days and nights per year in most cases. The plus is that the owners can purchase real estate while having access to luxurious hotel amenities like a spa, gym, room and personal butler services. More condo-hotels are being built because they simply make financial sense, experts say. Hotel developers can spread risk to condo owners and earn income from condo sales at the time projects are finished. In some cases, developers can break even upon completion. Further, condo-hotels by nature are better suited to surviving than a hotel on its own, experts say. “Condo-hotels earn like commercial hotels and appreciate like residential condominiums,” said Dante Alexander, the founder of the National Association of Condo Hotel Owners.

The Management Companies
The vast majority of condo hotels are operated by big-name companies like Ritz Carlton, Gansevoort, Fairmont and the Hilton, the consummate professionals when it comes to customer service. Most of the same services available at their high-end hotels are offered at their condo hotels. Condo Hotels vs. Traditional Vacation Homes or Timeshares: Condo Hotels are taking the place of traditional vacation homes and Timeshares because of their income potential. Hotel condo owners have the option of placing their unit in the hotel management program while it is not being occupied by its owner to generate revenue. The revenues are shared between the owners and the management company, (percentages can vary depending on the agreement). In contrast to traditional timeshares, a condo-hotel unit is purchased by its owner outright; while some people who purchase in timeshare is only entitled to the time that owners would occupies a unit. When you purchase a timeshare, you choose not only a set location but also a specific week or two that you will use your vacation home every year; but with a condo hotel, you have flexibility to use your unit whenever you want. Additionally, in most timeshares you are responsible for your own housekeeping and unit upkeep during your stay; while in Hotel-condos you get daily housekeeping as you would in a luxury hotel. You have access to room service, concierge services, maintenance services and check-in services It just makes more buying sense.

Condo Hotel Expenses
The Hotel Management Companies pay for most of the Hotel-condo’s operating expenses. And the owner typically pays for the Real Estate Taxes, Insurance and Capitol Investments.

Condo Hotels as a Purchase
For buyers, Hotel-condo projects offer prime locations in popular destinations and providing hotel amenities including full-time staff. Buyers have an opportunity to enroll in an optional rental program. “This type of project has great appeal for foreigners or out-of-towners because they can use it when they are in town and give it to the hotel when they are not,” says Le Meridien developer Edgardo Defortuna of Miami. “They get all the services of a four-star or a five-star hotel and have nothing to worry about.”