are condo hotels?
Condo hotels are typically luxurious high-rise properties
that include wonderful amenities from full-service
spas to infinity pools to fine-dining restaurants
and concierge services. To the average nightly guest,
they appear to be the usual upscale hotel. However,
the key difference is each of the hotel suites is
can buy condo hotels?
Any individual or company can purchase a unit in a
condo hotel. The buyer does not need hotel management
does condo hotel ownership work?
You own your individual condo. You can use it when
you want and enjoy all the amenities of the five-star
hotel. When you're not in residence, place your condo
in the rental program. The revenue your condo generates
will be split between the hotel management company
is the typical revenue split?
Although it varies by condo hotel, usually it's in
the 50-50 range, that is, 50% goes to the individual
condo hotel unit owner and 50% goes to the condo hotel
are the condo hotel operator's responsibilities?
To earn its 50% (approximate) of the revenues, the
management company operates the condo hotel rental
program and must market the units, take reservations,
man the front desk, ensure the smooth function of
amenities like restaurants and pools and also provide
the hotel services from housekeeping to concierge
and valet parking.
revenues from the condo hotel units in a property
In U.S. properties, they are not allowed to be pooled,
according to regulations of the Securities and Exchange
Commission. Thus, the revenue you receive will be
directly correlated to the revenue your condo hotel
other countries, some properties do pool revenues,
however, there is a formula to ensure that owners
receive a fair percentage based on the unit they own.
pays for maintaining and repairing common areas of
the condo hotel?
The cost is divided up among the owners who must pay
a monthly HOA fee. The fees typically cover common
area maintenance, property insurance, utility expenses
and reserves. The hotel management company pays for
its costs of operation including marketing, reservation
systems, salaries and other direct hotel expenses.
Will developers guarantee occupancy
rates in their condo hotels?
No. They will not guarantee occupancy rates or revenues,
in accordance with SEC regulations which prohibit
forecasting returns. For that reason, you want to
be sure you select a property that has a well-known
brand, good amenities and an appealing location to
help ensure occupancy rates are high.
condo hotels just like timeshares?
No, condo hotels give you whole ownership, whereas
timeshares allot to you a specific week or two per
year (and it's the same week or two every year) that
you can use your vacation home. Also, condo hotels
have a higher probability of appreciating over time
and can be easier to resell than timeshares, which
typically depreciate and are difficult to resell.
participation in the rental program mandatory?
No. You can decide whether you want your condo hotel
unit to be part of the rental program. However, there
may be living restrictions as to how many days per
year you can use your condo hotel unit. The number
of days varies from property to property, however,
you should remember that condo hotels are supposed
to be vacation homes, not primary residences.
the condo hotel living restrictions decided by the
In some cases, it's the developer who decides how
many days a condo hotel unit owner can use his unit
and how many days the unit should be placed in the
some cities and counties have regulations that dictate
the living restrictions to the developer. Some areas
need hotel rooms to meet the demand of tourists and
therefore set restrictions as part of their zoning
are condo hotels located?
The condo hotel concept started in South Florida,
and therefore the largest preponderance of condo hotels
is in the Miami-Fort Lauderdale area. However, in
recent years the concept has become increasingly popular,
and developers have begun to meet demand by building
condo hotels throughout the country and the world.
find condo hotels not only in Florida, but in popular
vacation destinations like Myrtle Beach, Las Vegas
and the Caribbean and also popular investment locations
like Dubai and Panama.
much do condo hotels cost?
That's a little like asking how much a car costs.
It depends on the car, right? Condo hotels can cost
anywhere from $150,000 to well over $1 million. The
factors that influence cost are location, the quality
of the product (i.e. a Trump five-star condo hotel
will cost more than an independent three-star property),
the amenities, and the features of the individual
unit you select.
the best deals on Trump condo hotels in the U.S. or
Of course you want to choose a condo hotel in a location
that you'd either a) enjoy vacationing in, or b) will
appreciate and result in a profit when you sell.
price is a key determining factor for you, you'll
definitely want to investigate some of the Trump condo
hotels being built abroad. Lower land and construction
costs help make prices much more affordable.
is the benefit of buying a Trump condo hotel versus
some other brand?
The Trump name is magic. It instantly infuses a property
with value. People know a Trump condo hotel will be
of the highest quality, and they're willing to pay
for that assurance, whether it be as a hotel guest
or a condo hotel buyer.
if you buy a Trump condo hotel, you're not only getting
a beautiful luxurious vacation home, you're also investing
in a piece of real estate that has good appreciation
other brands are there for condo hotels?
The biggest names in the business have gotten into
the condo hotel market. In addition to Trump, other
premium quality brands are Ritz-Carlton, Starwood,
W, Meridien, St. Regis, Hilton, Conrad, Hyatt, Rosewood,
Regent International and Sonesta.
condo hotels primarily vacation homes or investments?
They're actually both. However, in accordance with
SEC (Securities and Exchange Commission) regulations,
developers are only allowed to sell condo hotels as
real estate and a lifestyle.
hotels cannot legally be marketed as securities. Therefore,
you won't be able to get information such as hotel
occupancy forecasts, proposed hotel rates and expected
returns on investment. Developers and realtors are
not permitted to provide this data.
makes a condo hotel successful?
The same things that make a hotel successful make
a condo hotel successful - good location, solid management,
a strong brand and an attractive amenity package that
will appeal to owners as well as guests.
types of amenities should I expect in a Trump condo
properties typically feature the best of everything.
You can expect all the amenities and services you
would find at a five-star hotel. These often include
full-service spas, fine-dining restaurants, infinity
pools, state-of-the-art fitness centers, concierge
service and more.
are the key benefits to owning a condo hotel?
There are three. First is the concept of owning a
hassle-free vacation home in an outstanding location.
Remember, the hotel management company takes care
is that you receive some rent revenue when you're
not using your condo, and this income helps offset
the costs of ownership. You could even see an annual
profit, although you don't want to count on this factor
because it's based on occupancy rates and other variables.
is the idea of owning an asset that has potential
to appreciate. When you choose to sell your condo
hotel unit, presumably it will be worth more than
what you originally paid.
all condo hotels newly built?
Generally speaking, there are two types of condo hotels
- those built as new construction and those that are
conversions of existing hotels or resorts.
is better, a new construction condo hotel or a conversion?
That depends on a lot of factors. You have to look
at each property individually. While a newly constructed
building is less likely to have maintenance and repair
issues down the road, a converted property might have
a superior location.
heard the expression, "They're not building any
more oceanfront land." Well in some communities
if you want an oceanfront condo, that means you have
to buy into an existing building.
same principle would apply to New York City or Chicago
where there is no new real estate and a developer
must either convert an existing building or demolish
what's there and start fresh, which can be quite costly.
there any other benefits to going with a conversion
over a new construction condo hotel?
Timing can be a big factor. Building a condo
hotel from the ground up can take 18 to 24 months.
If you want your vacation home NOW or you're trying
to do a 1031 Exchange which has a specific deadline,
a conversion might be your best option.
it cost extra to use a real estate broker to purchase
a condo hotel unit, rather than going direct to the
No, it does not cost extra. The price is exactly the
same, as everyone works off the developer's price
list. Built into the prices is a realtor commission
which either goes to an in-house salesperson or can
be split with an outside co-broker. Either way, the
final price to the buyer is always the same.
condo hotel prices negotiable?
When you're buying a condo hotel property in pre-construction,
which is primarily what Trump Condo Hotels sells,
the prices are usually not negotiable. The developer
sets them, and everyone abides by them, including
in-house salespeople and outside co-brokers.
only times that prices are negotiable are in extenuating
circumstances such as you're buying more than one
condo hotel unit, you're buying the largest, most
expensive unit in the building, or you're buying certain
inventory which the developer is anxious to move (i.e.
the last few units).
you get financing for a condo hotel unit?
Yes. Many lenders offer condo hotel financing. However,
because it is considered a second home, not a primary
home, the interest rate may be higher. Lenders assume
that there's more risk in lending money to someone
buying a vacation home. That is, you're less likely
to default on a primary residence than a second home.
is the best time to buy a condo hotel?
If you want the lowest price and the largest selection
of units, the optimum time to purchase a condo hotel
unit is in early pre-construction stages. Developers
have planned price increases throughout the selling
process. If you get in early, you can take advantage
of first-tier pricing.
how do you find out about condo hotels in early pre-construction?
Getting the scoop on a new property can be challenging.
After all, there's no building or even construction
site to catch your eye as you drive by.
best bet is to work with a realtor who specializes
in condo hotels. He or she monitors the market and
has relationships with developers who can advise him
or her of buying opportunities. You can also subscribe
to a newsletter like the Condo
Hotel Property Alert which notifies
readers when new properties come on the market.
Have more questions? Is there something specific you'd
like to know about condo hotels? We welcome your inquiries.
You'll get a personalized response within 24 hours
(usually much less).
us today at info@WorldClassCondoHotels.com
or call (305) 944-3090.