Miami has always been the playground of choice for beach goers, party goers and tourists in general. The constant demand of people wanting to live and play here makes Miami a natural choice for the Condo-Hotel concept. Almost every major hotel brand in the world has one or is building a new Condo-Hotel in the city. But what is a Condo-Hotel? What makes it a good investment? Why would someone choose a condo hotel rather than a traditional condo or a timeshare? Find below the answers to the most frequently asked questions and more in our comprehensive guide to buying a Condo hotel in Miami.
What is a Condo Hotel and how does it work?
Condominiums are generally high-rise buildings operated by hotel brands. These are usually built close to popular holiday destinations. Condo-hotel accommodations are for sale to those who wish to own them as a second home or holiday property. The owners then have the option of placing their condo in the hotel's rental program to earn income during their absence.
Perhaps the best part of buying a Condo-Hotel is that the owner inherits all the amenities, services and 5-star luxuries associated with the hotel brand. Typical amenities include spa services, fine dining, discos, lounges, lavish pools, room service, concierge desk and housekeeping.
Is a condo-hotel the right choice for me?
If you answer yes to the following, then a Condo-Hotel would be the right choice for you:
You plan to use it only as a vacation property
You plan to visit only a small percentage of the year
You like the idea of owning a slice of luxury in a world-class hotel brand
Earning a rental income without using your property is a priority
Is the purchase of a Condo-Hotel a good investment?
As with any other investment vehicle, the question of whether it makes sense or not depends on your needs and your choices. Here are some things that affect your return on investment:
Not all hotel brands are built the same way. Your revenues depend directly on the image and brand management of your hotel. The higher the value and the management of the brand, the more you can expect to win by night. This means that it becomes extremely important to choose the right brand based on your investment capacity.
Splitting of income. If you have chosen to sign up for the hotel rental program, keep in mind that you will share the revenue with the property. This means that you can pocket between 35 and 60% of the income, depending on which condo-hotel you choose. However, a 35% reduction in a well-established premium brand could lead to better annual returns than a 60% reduction in a lower brand.
Limits of the projected data. Since developers are only allowed to sell condominiums as real estate and not as investments (as reported by the Securities and Exchange Commission), you will not receive any data on occupancy forecasts, proposed rates or mortgage rates. expected yield for pre-construction projects. However, existing properties can share historical revenue data, which can give you a good idea of what to expect.
No guarantee on occupancy rates or income. Again, as the SEC restricts the sharing of any kind of projected data, no real estate agent or developer is committed to making any revenue or rate estimates. In addition, the revenues of your Condo-Hotel will be as dependent on the weather, the economic or political climate as the rest of the hotel industry.
How to make your Condo-Hotel a successful purchase?
Once you've decided that a Condo-Hotel is the right choice for you, check out the following checklist to make sure it's also a wise purchase:
Good location. Make sure your condo-hotel is in a neighborhood frequented by tourists.
Strong brand. The value of the brand is one of the most basic elements that will help improve marketing, occupancy rates and revenue per night.
Attractive amenities. What is a hotel without its amenities? Make sure the amenities go with what you spend.
Solid management. Even the most attractive amenities can become mediocre without proper care and maintenance. Strong management must ensure that your suite and hotel are always in perfect condition.
Investigate around. Be sure to check out nearby properties, condo-hotels in different parts of the city, prices of similar condo-hotels.
Overall, the Condo-Hotel is a great way to enjoy a fabulous property, located in some of the world's leading tourist destinations, and powered by a world-renowned hotel brand. It also proves to be an excellent investment opportunity, in which rental income ends up essentially covering ordinary expenses while leaving a sufficient profit margin.
Miami offers a wide variety of Condo-hotels and we will be happy to introduce them to you. Do not hesitate to call us or email us to help you in your search for the best Condo hotel.