Perhaps you’re on the fence regarding which type of property would best suit your needs, a condo hotel or a straight condo. Clearly, both have their benefits, and the ultimate choice is an individual one. However, the following information should help you to at least discern the differences between the two.
Price of Condos vs. Condo Hotels One of the primary distinguishing features between condos and condo hotels is price. Condos, on the average, cost less. Prices for condos can start as low as $30,000, although the most luxurious condos can cost hundreds of thousands. Prices for condo hotels begin at about $200,000 and go up to $3 million or more.
Amenities in Condos vs. Condo Hotels The question then becomes, what do you get for your money? The average condo has a community pool and some common areas. Your individual unit would likely be sold to you unfurnished.
A condo hotel, on the other hand, has many of the amenities you would find at a high-end hotel. In addition to a pool (or pools), there is probably an on-site restaurant (possibly several), a lounge, a spa, an exercise facility, poolside bar, etc. Your condo hotel unit would likely be sold to you completely furnished with high-end furniture and appliances and would be rental ready.
Services Available in Condos vs. Condo Hotels The level of services is also a key difference between condos and condo hotels. In a condo, you would be responsible for your own housekeeping and unit upkeep. In a condo hotel, you would get daily housekeeping as you would in a luxury hotel. You would also have access to room service, concierge services, maintenance services and check-in services.
Remember that the vast majority of condo hotels are operated by big-name hoteliers like Ritz Carlton, Trump and Hilton. You would, therefore, find most of the same services available at their high-end hotels offered at your condo hotel.
Locations of Condos vs. Condo Hotels Location is a big factor with regard to any type of real estate. Condos and condo hotels are no different. Condos can be found in almost every major market across the country. Some condo developments are in resort areas while others are not.
Condo hotels, on the other hand, at this time are only available in a handful of locations, most of which are major resort areas, the primary ones being Florida and Las Vegas. Condo hotels are usually built on the most desirable pieces of land such as on a golf course or overlooking the ocean or the Las Vegas Strip.
Rental Income Potential in Condos vs. Condo Hotels As the owner of a condo, you would have the option of renting out your unit when you’re not using it. However, you would likely be responsible for finding your own renters, preparing the unit for those renters, and collecting the rent. Oftentimes, the condo association’s approval may be required. You would keep 100% of the rental revenue.
With a condo hotel, all those details are handled for you. When you’re not using your condo hotel unit, you simply place it in the rental program. Renters would be found for you, and all aspects of the renters’ stay would be handled by the hotel management company. You would receive a significant portion of the rent revenue; however a percentage would go to the management company.
Because the condo hotel most likely is a major name (such as Hilton or Ritz Carlton) and has a centralized reservation system, the property’s management would probably have better success at keeping your unit rented than you would as an individual condo owner.
Potential Appreciation of Condos vs. Condo Hotels Which type of property, a condo or a condo hotel unit, is likely to appreciate more? Once again, speaking in general terms, most condos appreciate relatively slowly. Because there are so many condos on the market, the rules of supply and demand help keep prices down. For the same reason, condos can be hard to resell.
Condo hotels, on the other hand, are a relatively new type of property investment. Currently they are limited to just a handful of locales across the country.
Because the supply is so small, and demand is currently high and seems to be steadily increasing as more people learn of this unique real estate product, most investors can expect their condo hotel units will appreciate.
As evidence of the high level of demand, many condo hotels are sold out in pre-construction. Often the developers, sensing the high demand, will themselves often raise prices many times before all units are gone. That’s why it’s best to buy into a project in early pre-construction stages. A realtor who specializes in condo hotels can clue you in to new properties coming on the market.
For example, The Mutiny condo hotel located in Coconut Grove, Florida was the first condo hotel to be built in South Florida. From the time the developer began accepting deposits until it sold out, there were nine price increases. People who bought early did exceptionally well.