Condo
Hotels Seen as the
Ultimate Vacation Home
If
home ownership was once the tangible evidence of
success in America, today a vacation home is the
consummate symbol of truly having arrived. But for
many, limited time to spend using and maintaining
a vacation home, has kept them from taking the plunge.
Along
comes the condo hotel, a new variation on the traditional
vacation condo or family beach house. These hassle-free,
upscale properties could be the ultimate second
home for today's well-to-do.
Condo Hotels Defined
"Condo hotels are fully-furnished condominium
suites located in beautiful hotels and resorts around
the country," explained Joel Greene, president
of Trump Condo Hotels, a national real estate firm
that specializes in the sale of condo hotels operated
by the Trump franchise.
"Owners have access to all the magnificent
amenities of a five-star hotel like resort-style
pools, fine dining restaurants and rejuvenating
spas. They also get all the hotel services like
daily housekeeping, room service, valet parking
and an on-site concierge, everything you could want
when on vacation."
Owners of condo hotel units can use their vacation
home when they'd like. When they're not there, on-site
hotel management company takes care of all operational
issues. This includes everything from finding hotel
guests to rent the condos, to maintaining the condos
and common areas, to ensuring the smooth operation
of all amenities.
How Rent Revenue Is Split
The
management company receives approximately 50% (it
varies by property) of the revenue the condos generate
in rent. The balance goes to the individual unit
owner.
According
to Greene, unit owners are more likely to receive
more rental income by participating in the hotel's
rental program than if they try to rent out the
condo themselves. "The hotel usually brings
with it a national affiliation, an international
advertising program, a sophisticated reservation
system, brand recognition and management expertise."
Many condo hotel owners say they can more easily
justify the purchase of a condo hotel unit than
a traditional vacation home. "I always hesitated
to buy a second home in the past because I knew
we could only use it a few weeks out of the year,"
explained Cara Masters, who recently purchased a
condo hotel unit in Fort Lauderdale, Florida. "A
condo hotel was the perfect solution because whenever
we're not there, the condo is rented out. The income
it produces helps cover its costs."
What Condo Hotels Cost
Prices
for condo hotel units range from $200,000 to upwards
of $2,000,000 for five-star, ultra-luxurious homes.
They usually include all appliances and furnishings
as well as impressive design features like gourmet
kitchens, luxurious bathrooms, marble tile and hardwood
floors.
Condo hotel buyer, Sam Chauncey, said he always
wanted a vacation home for his family but knew he
didn't have time to contend with the kinds of problems
he remembered seeing his parents handle with a lake
house they owned when he was growing up.
"Even though we only used the lake house in
the summer, it was a year-round burden. Burst pipes,
rotting deck, fading paint, renters who didn't pay
up - no thank you." Chauncey said he didn't
want the added chores nor the stress.
Instead,
Chauncey recently put a deposit on a condo hotel
unit at New Oasis at Sea Mist Resort, a to-be-built
condo hotel in Myrtle Beach. "When I learned,
someone else handles all the work, I knew a condo
hotel was right for me."
Condo Hotels Go Global
Condo hotels are appearing in all sorts of appealing
destinations like Miami Beach, Orlando, Las Vegas,
Myrtle Beach, Chicago, Colorado and the Caribbean.
"The concept started in Miami," Greene
said, "but it's definitely catching on throughout
the country. We're also seeing condo hotels appear
in Canada, Europe, Asia and the Middle East. It
is becoming a worldwide phenomenon."
In
addition, buyers are coming from all over the world,
not just the United States. W International, a London-based
company that markets condo hotels in Great Britain,
finds that U.K. buyers are enchanted with the condo
hotel concept.
According
to Ann Adenius, president of W International, they
welcome the opportunity to have a vacation home
in the U.S. and have a particular affinity for Orlando,
Florida. "More than 40% of the condo hotel
units sold in Orlando last year were to U.K. buyers,"
she said. "A condo hotel is ideal for them.
They want to go on holiday once or twice a year
in the U.S. but do not want to be responsible for
finding renters or maintaining their property from
overseas the rest of the time," she said.
Big Brand Names and Luxurious Amenities
Most upscale condo hotels are operated by highly
reputable hotel franchises like Trump, Hyatt, Hilton,
Starwood, Sonesta and Ritz-Carlton that know how
to cater to buyers who demand quality.
"When I go on vacation, I want to be pampered,"
said Sandra Kaplan who recently decided to reserve
a unit in pre-construction stage at the W Las Vegas
condo hotel. "I want to relax, not do any housekeeping
or cooking. A condo hotel is perfect for our family.
The kids can spend the day at the pool. I'll go
to the spa and fitness center. And my husband enjoys
the casino. There's something for everyone."
Investment Aspects
While having a place to vacation is the primary
reason for purchasing a condo hotel, some buyers
say they the concept has appeal as an investment.
Places like Las Vegas, Orlando, Miami and Myrtle
Beach have seen double-digit increases in real estate
appreciation in recent years. Many condo hotel owners
in those areas are betting the surge in property
values will continue. When they sell their vacation
homes, they're hoping to make a significant profit.
"I bought a condo hotel to diversify my portfolio,"
said George LaSalle who purchased a unit at The
Cube condo hotel in Dubai, a place he said he is
not planning to spend his vacations. "I was
able to buy a five-star condo hotel for under $300,000.
I'm looking forward to seeing decent annual returns
and an increase in value when I'm ready to sell,
probably in a few years."
Now LaSalle, who lives in Phoenix, says he's looking
for another condo hotel to buy. But this one will
be near a beach in the U.S., one he's likely to
use as a vacation home as well as an investment.
"I've hesitated to buy real estate in the past
because I didn't want to become a landlord and assume
all the problems that come with it. A condo hotel
gives you all the benefits of ownership - a great
place to vacation, rent revenue of offset costs,
and appreciation potential -- without any of the
hassles."