Are Condo Hotels a Good Idea?

Author:	Lucas Jones
Source:	Homes Discovered
Date:	August 25, 2006

There is a recent trend toward building in markets with tourist potential.  Companies have begun building what are called Condo Hotels.  The concept is a hybrid of a regular home and a rental property.  You can live in it all you want but when you're not, it gets rented out.  Generally these condo hotels are lavishly furnished units in a large upscale hotel.  The hotels are run by some of the most famous names in the world such as Four Seasons, Ritz Carlton, Sonesta, Starwood or Hilton and are generally found in high-rise buildings.  The feature that makes these condo hotels so great is in how they are managed. When the owner of the condo hotel is not living in the unit the hotel puts it into their rental program which finds tourists or tenants using the hotel's name recognition, advertising, national affiliations, centralized reservation system and management expertise.  The owner of the unit usually gets a higher level of rental income than they normally would from a traditional vacation home.  Also, the hotel manages everything like dealing with the renters, housekeeping, and maintenance of the condo. It's great to make rental income from your vacation property but you these properties make even more money off the appreciation value of the unit.  Most condo hotels are located in seasonal resort areas like South Florida, Las Vegas, and some islands of the Caribbean and they generally appreciate faster than most other homes and condos in the same areas. Condo hotels appeal to everyone from investors to those looking to purchase a second home or vacation home.  The value of these properties will most likely hold since these areas attract lots of tourists who rent hotels year round.

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