There’s a new market in town, and it’s called the condo hotel market. Condo hotels are condos that operate, from a legal perspective, as hotels. Rather than living in them like a normal condo, however, these ones are more suited for frequent travelers because whenever you are not at home, the hotel will take care of renting out your condo for you. The income made from that sale is then split between you and the hotel.
Say you bought one of these condos – you would then own the space, but the hotel would be the management. You’d pay condo fees, as per usual, and you’d still be able to rent out your place. But there are limitations.
See, when you purchase a unit, in your agreement, it will clearly state how much of the rental income you get. (You don’t get it all.) You also pay higher maintenance fees in this situation, because a refurbishment fund is baked into the cost. You need this, because by paying this expense, you’re making the hotel responsible for taking care of repairs, and replacing furniture when needed.
Another catch is, you are not actually allowed to live in your condo for long stretches of time, since part of the commercial side of this arrangement is having a pool of rentals available to, well, rent. There’s also no guarantee that when you’re not using your place, that it will be rented. And you only make income while it’s being rented.
So, actually, the only foreseeable way this could be practical is if you group bought one of these units as, like, a time share property. You could create your own schedule, instead of relying on a corporation, and you’d split the proceeds from the rental income down the line. Otherwise, it doesn’t really sound all that it’s cracked up to be. Watch the video above to learn all you need to know about this hot condo-buying trend.