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Hotel News
Condotel.biz offers the latest condo hotel articles and real estate investor news to help potential investors research real estate investing and condo hotels. Find out what the media is saying about condo hotels.
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Checking Into Condo-Hotels
Published December 4, 2006 |
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People who do not like to visit the same place year after year, and those who can only get
away from their jobs on short notice, are not good candidates for condo-hotels, says Greene.
Another drawback is that, unlike a real home, you are not allowed to decorate your unit the
way you like. While owners are given storage space to keep their personal mementos and family
pictures when they are not in residence, they can't, say, put in a new kitchen or even, in
most cases, repaint the bathroom without permission from the hotel or the developer.
Break-Even Investment
There are two primary reasons for this. First, these are still hotels and need to adhere to
certain consistent design standards within the property. Second, to protect consumers, the
U.S. Securities & Exchange Commission forbids developers to use return on investment as an
incentive to buy a condo-hotel unit. Because consumers can't sink money into renovating the
property, the likelihood of being able to flip it for a high multiple of the original price is
reduced.
"Do not buy this if you are looking for good cash flow," Greene adds. "It's a vacation home
that may happen to be an investment." However, he admits, "it is designed to break even."
A third drawback is liability. Once you own a condo-hotel, you essentially become an hotelier
of a unit subject to the same threats as the highly cyclical hotel industry, including
competition, hurricanes, and terrorism. If your beachfront condo-hotel gets walloped by a
hurricane or the hotel goes out of business for any other reason, you can't just pack your
bags and catch the next flight out as you would as a normal hotel guest.
While you may not have complete freedom to design or choose your vacation getaway, what you
will get is a hassle-free home with world-class service in a fabulous destination. And the
newest condo-hotels—reshaping skylines in Mexico, the Caribbean, and Canada—are more elegant
and extraordinary than ever.
"They may not ever take over roadside inns, but [condo-hotels] represent a paradigm shift in
modern development," says NACHO CEO Dante Alexander.
Luxury Properties Galore
BusinessWeek.com put together a list of some of the condo-hotels and hotel residences that
are generating the most buzz, selling the most units, and seeing the fastest appreciation in
prices. Most of the featured developments are under construction, while some haven't even
broken ground yet. Others are landmark hotels, such as the Plaza and Gramercy Park hotels,
both in Manhattan, which have undergone complete renovations to include residences.
There are colossal micro-cities in Las Vegas, ultra-luxury escapes in Manhattan, and
Venice-inspired "canal communities" in the Bahamas and the Dominican Republic.
While many units in these four- and five-star hotel developments will cost you upwards of $5
million, you may be pleasantly surprised to see that a few, like the Trump Ocean Resort in
Baja, Mexico, start in the mid-$200,000 range. The opportunity to own a piece of oceanfront
Trump property for that price has units like these selling at warp speed, according to the
Condo Hotel Center's Susan Greene.
"We pray every night for Donald's continued good health," she says. "He's going to help us
retire early."
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