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Rent Revenues Generated by Condo Hotel Units

Question

How much revenue can I hope to receive from a condo hotel unit?

Joel's Response


This varies greatly depending on the property and its location. Those properties with brand name management companies, sophisticated marketing and reservation systems have a better shot at bringing in revenue than a non-brand name property in the same area. Of course, it also depends on "lost income," that is, times when you yourself are using your unit. Obviously, the more you use it, especially if you choose to do so during peak season, the more your bottom line will be affected.

Question

If I choose to let my condo hotel unit be rented out, will I share in a rental pool of revenue generated from all units rented, or will I only obtain rental revenue based on the amount of time my own unit is rented?

Joel's Response


At almost all condo hotels, there is never a pooling of the money. You only get the revenue that your individual unit generates.

Question

I assume most condo hotel owners use the revenue their unit generates to pay for maintenance fees, property taxes, insurance and mortgage costs.

Joel's Response


Yes, and for some owners, the rental revenue generated by the property can cover all of their expenses.

Question

Will condo hotel developers or their management company guarantee rent revenues?

Joel's Response


In the U.S., the answer is an emphatic, NO! SEC rules and regulations forbid the sale of condo hotels as an investment. They must be sold as vacation homes and a lifestyle. Therefore, there can be no guarantees about the income that a buyer can, will or might receive. In condo hotels abroad, particularly in places like Dubai, there are rental guarantees, which is part of what makes investing in a foreign country so appealing. If this concept could have appeal to you, learn more about Dubai properties here, www.CondoHotelsDubai.com.

The above question(s) were 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.

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