USING A CONDO HOTEL TO DIVERSIFY
INVESTMENTS

Question: Would you recommend buying a unit in a condo hotel for investment purposes? I would not use the unit for more than 15 days a year. If not, would you recommend buying a traditional condo?

Please note that my intent is to diversify - I strongly believe in the Miami real-estate market. Additionally, I would like this investment to serve as a source of monthly income as well as would count on the property appreciating over time (with the potential for a reasonable resale profit).

Answer: Yes, I would recommend a condo hotel unit for investment purposes, especially since you would not use the unit for more than 15 days a year. You are the ideal buyer for this kind of property.

The condo hotel option allows you the 4-5 star vacation you want, the appreciation of the real estate and the benefit of somebody else paying down your mortgage. The maintenance and real estate taxes that you would have to pay would apply whether you bought a condo or a condo hotel.

Another big benefit of the condo hotel is that it is headache-free ownership. Nobody's calling you in the middle of the night to say the toilet is backed up or the fridge isn't working. The management handles all that while you go on about your life without a care.

Besides, if you were to get a straight condo, you wouldn't be able to use your unit when you wanted if you had a long term tenant. And you wouldn't want a short term tenant just so that you would have the unit available for your own use now, would you? If you did, you'd now have the headache of trying to lease it out again to someone after your two weeks of use.

You also said that "I strongly believe in the Miami real-estate market." I want you to know that I do too. As a matter of fact, just two weeks ago, the Miami Herald printed a story stating that real estate values have gone up in Miami Dade County 61% since 1999 or basically, 15%+ per year. And that is inclusive of all of Miami Dade County, not just the oceanfront property which is scarce and more valuable.

I understand that you would like this investment to serve as a source of monthly income as well as would count on the property appreciating over time. As long as your expectations are realistic,I honestly believe that this type of real estate will meet your needs. What is most important is finding the right property with a top-notch management company and reservation network.

The above question was submitted via e-mail by a visitor to www.condohotelcenter.com. The answer was 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.