Originally Posted on Tuesday, September 12, 2006
In today's Sun-sentinel there is an excellent article about the Condo Hotel craze that has swept South Florida and the nation for the last few years. The article has statistics that show Florida far outpacing the rest of the nation in new Condo-Hotels under development. With 31,511 units currently in the pipeline, Nevada is the only other state that comes close, boasting 30,112 units. The other states in order of units being developed are California, New Jersey, Colorado, Arizona, Illinois, Massachusetts, Tennessee and Hawaii.
There are many things to consider when purchasing a condo-hotel unit. Since it is a business in addition to being real estate, a condo-hotel unit should be given even closer scrutiny than a regular condo or single family home. This point is amplified by the fact that there is almost no condo-hotel that will gauruntee that your unit will be rented while you are not there. You cannot determine how much travelers are willing to pay to stay at the hotel you own a unit in. And the condo-hotel cannot gauruntee that your room will rented becuase they move dangerously close to coming under the SEC's definition of a security. And even if your room is rented all the time the revenue (which you share with the hotel) will probably not cover your expenses. So will your monthly costs be offset by the profit you will eventually make by selling it?
There are defintely some things that you might not have to deal with in a regular condo, however, if you find a condo-hotel that you fall in LOVE with, meaning that you would do anything to spend all of your vacations there, then a condo-hotel is definitely the way to go. You will get a place to stay that you will own as opposed to something like a timeshare that you only own a portion of. So a condo-hotel can be a great deal if you do your homework, but it can be a disaster if you don't.
There are many things to consider when purchasing a condo-hotel unit. Since it is a business in addition to being real estate, a condo-hotel unit should be given even closer scrutiny than a regular condo or single family home. This point is amplified by the fact that there is almost no condo-hotel that will gauruntee that your unit will be rented while you are not there. You cannot determine how much travelers are willing to pay to stay at the hotel you own a unit in. And the condo-hotel cannot gauruntee that your room will rented becuase they move dangerously close to coming under the SEC's definition of a security. And even if your room is rented all the time the revenue (which you share with the hotel) will probably not cover your expenses. So will your monthly costs be offset by the profit you will eventually make by selling it?
There are defintely some things that you might not have to deal with in a regular condo, however, if you find a condo-hotel that you fall in LOVE with, meaning that you would do anything to spend all of your vacations there, then a condo-hotel is definitely the way to go. You will get a place to stay that you will own as opposed to something like a timeshare that you only own a portion of. So a condo-hotel can be a great deal if you do your homework, but it can be a disaster if you don't.
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