Sunday, April 20, 2014

Condo-Tels as an Investment

Have you ever considered owning your own vacation home? Does it sound like an impossible dream? That's what I thought until a couple of years ago then, I bought a beach front condo on Tybee Island, one of Georgia's barrier islands. Tybee Island is a fantastic little island with many well known restaurants, tons of island events throughout the year and plenty of island wide parties and festivals. However, owning your own place in a vacation resort may be easier that you think.

Many individuals imagine owning their own vacation home. But often worry about keeping it, renting it out in the off-season, as well as justifying the expense when it’s simply to be used for 2-3 weeks of the year. These factors prevent many from making their dream a reality. Now a condo hotel, a revolutionary type of vacation home ownership, offers a welcome remedy to each one of these problems.

Also referred to as condo-tels or aparthotels, condo hotels have already been growing in popularity for being an approach to buying a luxurious second residence.

Condo-tel buyers purchase a real condo unit within an upscale hotel or even in a beach resort. The property may function as a full-service hotel, and owners gain access to all amenities, conveniences and services exactly like resort guests.

They obtain a deed to their unit and may use their vacation home whenever they want. When not in staying in the residence, they are able to place their unit into the hotel’s rental system and share in the income it creates. Like most property investments, the owner may also sell his condominium unit anytime and may make money on it’s appreciated worth.

Young professionals, baby boomers and senior citizens alike are only beginning to uncover the benefits of buying a condo-tel unit. They enjoy the hassle-free characteristics of condo hotels as an additional home while a professional management organization handles everything from property maintenance to locating guests to rent their unit. In addition they consider condo hotels a way to diversify their investments.

Condo Hotels Aren’t a Typical Timeshare

As hybrid properties, condominium hotels vary from timeshares in several ways. With timeshares, purchasers just pay for the right to use the property for an arranged amount of time every year, usually just one week. They don’t own the title to the property, and they don't receive any rent income for the days they’re not in property.

Condo-tel owners may use their condos whenever they want all year round, within the rules of the individual development. They obtain a portion of any income their unit yields when they’re not there and the unit is rented out to guests.

Timeshares traditionally decline in worth as time passes, rather than appreciate. While the history of condominium resales is rather limited, they are viewed as an appreciating asset.

Condo-Tels Offer Amenities

How do condo-tels differ from owning a conventional single family home or condominium? Individuals who buy a traditional condominium pay property taxes, insurance and maintenance costs, but typically don’t get access to the amenities.

Condo-tels, however, aren't your standard second residence. They're suites in a resort designed condominium.

The properties often feature four or five star amenities, which range from full-service spas and fitness centers to fully-equipped business centers and fine restaurants. They may include exceptional hotel services such as concierge, valet and room service.

With condo-tels, owners reap the rewards of condominium ownership while enjoying the privileges of a full-service hotel.

Condo-Tel units range between studios and full-size apartments to luxurious penthouses and villas. Prices for these properties range between $250,000 to over one million for top level properties.

Condo-tels Generate Income to Cover Their Expenses

What makes the condo-tel concept so appealing? When owners aren't utilizing their condo-tel unit, they have the choice of placing it into the hotel's rental system. They obtain 60% of the revenue their unit generates with the balance going to the resort operator. The income generated helps offset the expenses of owning a vacation home.

Even though many hotel operators don’t guarantee the rental of the condo, by taking advantage of the hotel's brand name, strong sales and advertising capabilities, centralized reservation system and management expertise, owners typically get a higher-level of rental income than they might from the traditional vacation home.

Moreover, ownership is 100 % hassle-free, because the hotel operator manages finding hotel guests and maintaining the unit in addition to managing the property’s many facilities.

Condo-tel Expenses Are Usually Shared

How are the ownership costs split? Within the rental contract, the hotel will pay for most operating costs for example housekeeping, administration, sales and advertising. The condo-tel proprietor typically pays for property taxes, insurance and capital improvements. The rental income that owners receive helps defray these costs and, in some instances, provides additional income.

Condo-tels as Investment Tools

While developers primarily offer their condo-tel units as a life-style and vacation property alternative, many purchasers see merit in the condo-tel concept as an investment tool. They claim it provides them the best of both worlds. They are able to enjoy all the benefits of vacationing in a first-class resort while they own a home that has the potential to appreciate.

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