Real Estate: If home ownership was once the tangible evidence of success in America, today a vacation home is the quintessential symbol of truly having arrived. But with limited time to spend using and maintaining a vacation home, the perfect solution has been elusive.
Along comes the condo hotel, a new twist on the traditional vacation apartment or family beach house. These hassle-free, amenity-rich properties could be the ultimate second home for today's well-to-do.
Condo hotels are designer-furnished condominium suites located in some of the most famous hotels and resorts around the country. Owners have access to all the wonderful amenities of a luxury hotel, like resort-style pools, upscale dining options, and rejuvenating spas. They also get the benefit of all the hotel services like daily housekeeping, valet parking and a helpful on-site concierge, everything you could want when on vacation.
Owners of condo hotel units can use their vacation home when they'd like. When not in use, they don't have to be concerned with boarding it up or maintaining it. That's because an on-site hotel management company takes care of all operational issues, including finding hotel guests to rent the condos.
Owners receive a share of the proceeds that their unit generates, usually about 50-percent. Unit owners are more likely to receive a higher level of rental income by participating in the hotel's rental program rather than trying to rent out the condo themselves. The hotel usually brings to the table a national affiliation, international marketing, a sophisticated reservation system, brand recognition and management expertise.
Many condo hotel owners say they can more easily justify the purchase of a condo hotel unit than a traditional vacation home.
"I always hesitated to buy a second home in the past because I knew we could only use it a few weeks out of the year," explained Mindy Sullivan, who recently purchased a condo hotel unit in Orlando.
"A condo hotel was the perfect solution because whenever we're not there, the condo is rented out. The income it produces helps cover its costs."
Condo hotels are popping up in all sorts of appealing destinations like Miami Beach, Orlando, Las Vegas, Myrtle Beach and the Caribbean. Prices for condo hotel units range from $200,000 to upwards of $2,000,000 for five-star, ultra-luxurious homes. We're also seeing condo hotels appear in Canada, Europe and the Middle East. It is becoming a worldwide phenomenon."
In addition, buyers are coming from all over the world, not just the U.S. For example, over 40-percent of the condo hotel units sold in Orlando last year was to U.K. citizens. The concept works well for them: they can use their home in the U.S. once or twice a year, and have the onsite management find renters and maintain the property for them the rest of the time.
Most upscale condo hotels are operated by highly reputable hotel franchises like Hyatt, Hilton, Trump, Starwood, Sonesta and Ritz-Carlton that know how to cater to buyers with discerning taste and demanding requirements.
"When I go on vacation, I want to be pampered," explained Cherise Fuller, who recently decided to purchase a unit at the Cosmopolitan condo hotel in Las Vegas.
"I want to relax, not worry about housekeeping, cooking and what to do with the kids. A condo hotel is perfect. The kids can head to the pool. I'll go to the spa and fitness center. And my husband can hang out in the casino. There's something for everyone."
While having a home-away-from-home is the primary reason for purchasing a condo hotel, some buyers say they like the concept because of its appreciation potential. Places like Las Vegas, Orlando, Miami and Myrtle Beach have seen substantial increases in real estate values in recent years. Many condo hotel owners in those areas are betting that their properties will appreciate in future years. When they sell their vacation homes, they're hoping to make a significant profit.
By Joel Greene
President of Condo Hotel Center
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