Condo ho­tels: the lux­ury in­come prop­erty

Sun Sentinel Broward Edition - Homespot - Broward East - - REAL ESTATE Q&A LIVING G SPACES - By Sa­man­tha ( Sam) DeBianch

The classier cousin

of a time­share, condo ho­tels (or Con­tels) are born from the same gen­eral idea: The use of a va­ca­tion prop­erty, only for a fi­nite pe­riod of time (un­less you de­cide to live there full time, of course).

That pe­riod of time varies from pro­gram to pro­gram, but the key dif­fer­ence be­tween own­ing a ho­tel res­i­dence and a time­share is that there is no joint own­er­ship. You own the unit, and the ho­tel takes the role of prop­erty man­ager, and en­sures that your prop­erty is oc­cu­pied, cleaned and main­tained when you’re not there.

Ho­tel con­dos or ho­tel “res­i­dences” as they’re deemed, are of­fered by high-end ho­tel chains like Ritz-Carl­ton and W Ho­tels. Ho­tel con­dos are a great op­tion if you visit a cer­tain lo­ca­tion of­ten, year af­ter year, and (typ­i­cally) around the same times.

Here in South Florida that could mean boat shows, con­fer­ences, hol­i­days, food and wine fes­ti­vals/ art shows, or just plain old va­ca­tion.

If you’re con­sid­er­ing pur­chas­ing one of th­ese high-end res­i­dences, here’s what you should ask: Q.

What is your rev­enue shar­ing pro­gram? A.

Be­cause the ho­tel ba­si­cally acts as a prop­erty man­ager, they’re en­ti­tled to a por­tion of the rev­enue gained from “leas­ing” out your unit when you’re not there. A tra­di­tional split is 50/50, but there are of­ten fees that are taken off the top for ad­min­is­tra­tion and in­fra­struc­ture. De­pend­ing on the pro­gram, th­ese could take 12 to 17 per­cent off the top, be­fore your 50/50 split — so make sure you know. Q.

Are there any black­out dates? A.

Ho­tels know they can charge top dol­lar at peak times, for ex­am­ple around Christ­mas/ New Year’s, or if there’s a spe­cial event hap­pen­ing like a con­fer­ence or boat show. If you want to use your prop­erty dur­ing this time, you may not be able to. Ask for a list of the black­out dates and make sure you make any ar­range­ments to use the unit way ahead of time. Q.

What are the main­te­nance/ HOA fees, and what does that in­clude? A.

Like any prop­erty with com­mon area like a gated com­mu­nity, condo or town­house, there’s go­ing to be costs as­so­ci­ated with its on­go­ing main­te­nance. The more ameni­ties you have, the more you can ex­pect that to be. Things typ­i­cally cov­ered in­clude se­cu­rity, pool and gym main­te­nance, and so forth. Q.

Is par­tic­i­pa­tion in your leas­ing pro­gram re­quired? A.

Some condo ho­tels will re­quire that you lease out your unit to ho­tel guests. Some won’t. Of course, if you don’t lease it out, you don’t gen­er­ate any in­come off your prop­erty — but if pri­vacy and ac­ces­si­bil­ity is more im­por­tant, a condo ho­tel where leas­ing isn’t manda­tory might be for you.

Have more ques­tions re­gard­ing condo ho­tels? Feel free to con­tact me for more in­for­ma­tion.

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