This should not be a concern for the individual investor. The key item to a successful condo hotel investment is the hotel operator. The better the operator and the franchise, the more likely the success of the property. No one should seriously consider managing the rental of their own unit. They could never compete with the advertising budget and reservation system provided by the operator.
It does, but for the better. Many luxury condominiums offer the same amenities, pool, fitness center, nice lobby etc. as the condo hotels. What they don't offer is the five star services, the maid service, the concierge, the room service and the world renowned chefs in the five star restaurants. All of this bodes well for the condo hotel owner upon re-sale.
Not necessarily. If buyers choose to live in their condo all year long and want the services of a five star hotel, then condo hotels make even more sense to them, once they have learned about the concept.
Condo hotels are a relatively new type of real estate, only having been around in South FL for about five years. Popularity and public knowledge of condo hotels is growing domestically and internationally. In fact, only a month ago, a United Kingdom magazine contacted us as they wanted to do a focus story on the subject for its premiere edition. This magazine, New Horizons-Florida, specializes strictly in luxury oceanfront properties in Florida for all of the UK citizens looking to buy or vacation here.
This is the single hardest question to answer. Few, if any, developers will even try because they would be violating SEC laws and would be subject to huge fines and penalties. As real estate brokers, we can't determine nor provide this information either.
We look at it this way. You can enjoy and use your luxury condo hotel unit and expect a strong appreciation, especially if it has a good location, name and operator. The revenue generated by your unit, will help defray the cost of ownership. Any return is just icing on the cake.
Higher floors usually mean better view and command higher rental rates. Similarly ocean views command higher rates; however, I believe that the Intracoastal city views are far more appealing because at night, the ocean view is pitch black.
Typically, developers allow room to pay a real estate commission (either to their in-house broker or an outside broker, like myself) plus 2-5% room to discount (negotiate) their price. Some do offer more of a discount when they are trying to close out and move on to their next projects, however, others actually increase their price near close-out if demand is still strong. There are no guarantees.
Typically, any discount is a good buy. If you don't buy it, someone else will, as many people perceive the discount as real even if it is not. Remember, the only time discounts are offered is when almost all the units are gone. If you want one and it's discounted, consider it a gift due to your good timing.
The earlier you buy in a property that is ultimately successful, the more appreciation you can expect. Take The Mutiny in Coconut Grove. When it was the first condo hotel to appear in South Florida, they had 9 price increases before selling out. People who bought early did exceptionally well.
The above questions were submitted via e-mail by a visitor to www.condohotelcenter.com. The answers were prepared by Joel Greene, a licensed real estate broker with Condo Hotel Center which specializes in the sale of condo hotel units and fractional ownerships in private residence clubs.