A condotel is a hybrid of a condominium and a hotel, allowing owners to purchase real estate and rent it out as a vacation or hotel space when not in use, providing income for the owner. The concept began as a way for hotel companies to finance new hotels, and owners receive all the advantages of staying in a hotel, including room service and use of amenities. However, there are risks involved, such as uncertain rental income and local laws limiting the owner’s use of the property.
A condotel is a mix between a condominium and a hotel. It allows buyers to purchase real estate but rent that property as a vacation or hotel space when they are not using it. In this way, the condotel actually makes money for the property owner when the owner is not using it.
To understand the concept of the condotel, it is important to understand a little about how the real estate sector works. Almost everyone stayed in a hotel. The hotel owner, usually a person or company, rents out rooms in the hotel for a fee. People rarely live in these rooms full time.
Meanwhile, condos are often sold as homes or second homes. Buying a condo is like buying a house. The landlord does not pay rent to anyone. The intention behind the condotel is to blend these two forms of real estate to create something that is the best of both worlds. They have all the luxury of a hotel, but the buyer owns them.
The condotel concept began as a way for hotel companies to finance new hotels. Building a hotel is expensive. Instead of building the hotel first and then letting people rent out the rooms, the condotel owners sell the rooms and suites as if they were houses in a housing development. Hotel companies make money to finance their building and buyers get all the luxury of a hotel without having to move out at the end of the week.
Owning a condotel offers the buyer all the advantages of staying in a hotel of the same brand. Thus, the buyer receives room service, maid service and concierge. He or she also has use of all hotel amenities such as the swimming pool and gym.
Another advantage of owning a condotel is that the room can be rented out. If the owner plans to be out of the country for a week or two, the hotel can rent the owner’s room at normal market rates. In exchange for booking and managing the space while the owner is away, the hotel takes 20-40% of the rental profit.
There are some disadvantages to this type of investment. No one can guarantee that the landlord will make money from the leasing process. After purchasing the room, paying the maintenance fees, and providing the hotel with your percentage of the rent, there may be little money left. In addition, local laws may prohibit the owner from living in the hotel more than a certain number of days per year.
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