A condominium hotel , also known as Condotel , hotel-condominium or Contel , is a building, legally condo but which is operated as a hotel, offers short term rentals, and that retains the front desk.
Condo hotels are typically high rise buildings that are developed and operated as luxury hotels, usually in big cities and resorts. These hotels have condo units that allow one to have a full-service holiday home. When they do not use this house, they can take advantage of the marketing and management carried out by the hotel chain to rent and manage a condo unit just like any other hotel room.
Video Condo hotel
Legal conflict
The US government is very strict about the kind of advertising that can vis-a-vis condo hotel projects do. Some condo projects have advertise themselves as real estate investments, but since the value of these condominiums as real estate investments is not entirely clear, the current US Government does not allow the use of these references when advertising a condo hotel.
Condo hotels were criticized in California for allowing developers to draft laws designed to protect public access to the beach. Since such facilities have hotel rooms, this hotel can be classified as a public accommodation, although the majority of the units are privately owned, and the facility is not much to accommodate the public.
In the Philippines condo hotels carry deed real estate condominiums. This allows foreigners to earn up to 30% of condotel units, unlike most other real estate. This has made this particular development popular in this country.
Maps Condo hotel
Location
Although not intended as a complete list, the most popular locations in the US for condo hotels include: Aspen, Chicago, Miami, Fort Lauderdale, Las Vegas Valley, New York City, Myrtle Beach, South Carolina, and Orlando, Florida. Condo hotels are also found in ski resorts and international destinations, such as Jaco, Costa Rica. Investors spent about $ 250 million on condominium hotels in 2006, with most of the expenditure concentrated in the resort area.
Cost
Note that analyzing the economy of a condo hotel unit is very difficult because of the challenge of getting accurate information about potential revenue streams. Developers uniformly provide no data or important forecasts for room rates or occupancy rates for fear of being under US Securities and Exchange Commission (SEC) regulations on investments, which are contrary to real estate regulations.
Financial considerations
The main factors that contribute to financial results in ownership are rental income, rewards or depreciation, lending and withholding taxes.
Rental income is shared by the management company, and the owner usually does not pay an upfront fee for management, which includes marketing and unit bookings. Particular monthly fee for units in rental pool including FF & amp; E (Furniture, Equipment and Equipment) reserve and resort fee (s). Although revenue-sharing between owners and management firms varies from project to project, most are around 50 percent. Most condo hotels, and especially branded hotels such as the Westin or Ritz-Carlton, are strategically located in the resort economy or popular urban destinations, allowing high rates every night and consistent year-round occupancy. Rental income from hotel guests depends on travel patterns and may decrease.
Many condo hotels, especially branded condo hotels, have experienced double-digit growth, and have traditional condos or single family homes in the same resort market. Condo hotel units are simple real estate costs that are delegated, and can be bought and sold like any other form of real estate. Due to the lack of resell data available to many of the developing markets where pre-construction condo hotels can be found, experts pay attention when considering the purchase of condominium hotels for investment purposes only. Just like traditional real estate, rewards are never guaranteed. This scenario is most recent in Las Vegas. Some of the more famous condo hotels have sold less on the resale market than during pre-construction.
Financing is usually more expensive than primary residence. Mortgage rates may be the full higher points, and in the past this was especially true because financial institutions are not familiar with the concept of condo hotels. Pre-construction purchases require significant down payment, and buyers will not see any financial return or can use their units until the hotel is finished and ready for operation. Furthermore, the owner may have to purchase additional insurance to protect against liability claims and some kind of damage or loss.
Additional tax benefits can be obtained through condotel ownership. If condominium hotels are used for non-residential premises or rental housing, the owners may be able to accelerate depreciation on their condo hotel units from 39 years, down to 27.5, 15, 7, and even 5 years. The hotel condo tax law determines this, and affects individuals on a case-by-case basis, as each potential buyer's tax situation is different.
Fees and services of homeowners association
Like most condos, condo-hotel owners are required to pay the cost of the homeowners' associations, commonly referred to as HOAs. Costs and services can vary greatly. Factors that cause fluctuations are the star rating and operating level of the hotel, and its physical location. A property located in the ocean, for example, can experience coastal weather on a regular basis, which in turn can increase the need for more regular maintenance to the exterior of the building. Along the same lines, the property located in the ski resort must face a strong winter storm and also have to deal with snow removal services.
Exceptions to the side, the many fees and services found in HOA remain and fluctuate very little from project to project. Such services typically include public utility units, public area utilities, individual space and building reserves, basic maintenance, sports area usage fees, security, pest control, mechanical repair costs, security alarm systems, parking lot maintenance, pool area maintenance, and management owners and administrative services. Items related to hotel guest impact are generally not included in HOA fees, these include households, and fees associated with hotel staff and operations.
Note
References
Source of the article : Wikipedia
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