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CONDO HOTEL OVERVIEW
Condo Hotels Combine Hassle-free Vacation Home Ownership with Real Estate Investment

Condo Hotel Description
Condo hotels are the newest trend in vacation home ownership. Buyers can own a luxury vacation home at a world-class resort and receive rent revenue whenever they are not using it.

Condo Hotel Locations
The condo hotel concept began in places like Miami Beach and Fort Lauderdale, and these areas have dominatedin terms of the quantity and quality of condo hotels. But now the concept is spreading to other parts of Florida including Orlando, Naples, Fort Myers and the Tampa-Clearwater area. Condo hotels are also cropping up in other cities outside Florida, in particular, Las Vegas and Chicago. Condo hotels are even becoming prevalent in the Caribbean and parts of Canada.

Condo Hotel Properties and Brands
Condo hotel properties are usually large, high-rise, luxury four-or five-star hotels operated by the biggest names in the hospitality industry like Four Seasons, Ritz-Carlton, Sonesta, Starwood, Hilton, Clarion, Regent International, Rosewood, Conrad Hotels, Bulgari and Le Meridien.

Condo Hotel Management Companies
Condo hotel owners have the option of putting their condo hotel unit into the hotel's rental program. This is what makes condo hotels so attractive. A professional management company takes care of renting out the units when they are not in use by the owner. By capitalizing on the hotel's name recognition, advertising, national affiliations, centralized reservation system and management expertise, condo hotel unit owners typically receive a higher level of rental income than they would from a traditional vacation home.

Condo Hotels Versus Traditional Vacation Condos and Single-Family Homes
Condo hotels are not the typical second home. They are fabulously-furnished condominium suites in some of the most famous hotels and resorts in the country. Owners have access to all the luxury amenities and services of the property, ranging from spas to fine dining to concierge services. Like a traditional vacation home, owners can use their home when they want. However, unlike a traditional home, they have the option of participating in the property's rental program and sharing in the revenue the home generates. Ownership is 100% hassle-free as all maintenance and rental issues are handled by a professional, in-house management company.

Condo Hotels Versus Timeshares
With a timeshare, owners are typically allotted just one or two weeks of the year to use their condo. They are always the same weeks unless the owner goes through a process to trade time with someone else's. With a condo hotel unit, owners have deeded ownership to their condo and can usually use it any time they want. Furthermore, when they're not using it and the hotel is able to rent the room, the owner receives a portion (usually in the 50% range) of the rent revenue. Finally, timeshares can be difficult to resell, even if the seller is willing to take a loss. Condo hotels, on the other hand, because of their prime locations, limited inventory and upscale quality, are a highly-desired commodity. If history is any indication, they appreciate over time and are readily resold, giving them added appeal as investment tools.

Condo Hotel Prices
Prices for condo hotel units vary based on location, size and amenities. They typically range from $300,000 to over $1 million for prime properties.

Condo Hotel Expenses
As part of the rental agreement, the hotel pays for most operating expenses such as housekeeping, administrative and marketing. The condo hotel owner typically pays the real estate taxes, insurance and capital improvements.

Condo Hotel Buyers
Typically, condo hotel buyers are vacationers who appreciate the many wonderful amenities available at luxury resorts and investors who recognize the appreciation potential of a revenue-generating vacation home. The appeal is not limited to U.S. buyers. The concept has received international attention. In particular, buyers from Latin America and Europe are competing with Americans for the best properties.

The Appeal of Condo Hotels
Condo hotels have tremendous investment appeal in today's markets because of low interest rates and a risky stock market that has caused investors to diversify and look for safer alternatives.

Condo Hotel Financing
Now that the concept has become accepted and well-known, U.S. lenders have been readily making loans on condo hotels, both to domestic as well as international buyers.

Condo Hotels as Investments
The Securities and Exchange Commission (SEC) does not permit developers or realtors to sell condo hotels as investments. They are sold simply as vacation homes and a "lifestyle." Nonetheless, many buyers are interested in the investment potential of condo hotels. Some of the factors they take into consideration are: Rent Revenue: Condo hotel units will produce rent revenue. That revenue can partially or completely offset the costs of owning and maintaining the vacation home.

Appreciation potential: The best selling point of condo hotels as investments is the rate at which they appreciate. The rate of appreciation for real estate throughout the country has been at historic levels. Most condo hotels are located in areas that have seen the highest appreciation rates such as South Florida, Orlando and Las Vegas. Furthermore, condo hotel units have seen higher appreciation rates than traditional single family homes and condos.

Diminished supply of available land: Desirable locations to build are not endless. There is a dwindling supply of available land in key markets, particularly land on the ocean in Florida and land on theStrip in Las Vegas, ensuring that condo hotels built in these locales have seen significant appreciation.Real estate as a stock market alternative: Many people seek to diversify their financial holdings, combining stock market investments with real estate holdings.

Condo Hotels Appeal to International Investors
Condo hotels are particularly attractive to international investors who wish to have a vacation home in the United States and yet don't want the hassles of caring for that home or renting it out when they're not using it.Additionally, the weakness of the dollar has enabled many international investors such as those from Europeto obtain upscale condo hotel units for what amounts to bargain prices.
Lastly, international buyers seek to invest their money in a stable environment and a flourishing economy. U.S. real estate including condo hotels often meets this need.

Best Time to Purchase a Condo Hotel Unit
There is a limited inventory of condo hotel units, and they're selling fast, unbelievably so. Many condo hotels are sold out in the pre-construction phase. There are many examples of large condo hotels selling out in 30-90 days, particularly those in Las Vegas and Miami.
As word continues to spread about condo hotels, more and more investors from around the country and around the world are learning of this new real estate trend and looking to participate. Furthermore, because demand seems to be outpacing supply, appreciating has been significant and rapid. Waiting even just a few months could cost thousands. With interest rates still at historical lows, all the factors point to today as the best time to act.