What everyone should know about Condo Hotel Investments

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What is a Condo Hotel, and are they good investments?

I guess that depends on whom you talk to.

I have been involved with Condo Hotel for many years; In business relationships with companies that manage them, and also as a unit owner and investor.

For the most part, I have been really, really happy with my investments, but like most people playing the real estate game, I have made some mistakes.

But that is for another topic. Let me tell you why I like Condo-Hotels.

I travel a lot, often to the same destination over and over again. I also love certain activities (skiing, snowboarding, mountain biking to name a few). Because the properties I have chosen are in destination resorts, they suit my lifestyle and have worked out really well.

But what exactly is a Condo-Hotel? In a nutshell, a Condo Hotel (or Condotel as they are know in the industry) is a hotel where each unit (typically a suite) is individually owned, and when you are not staying in the unit, it is rented out to the paying public on a nightly basis.

If you have ever stayed overnight in a ski resort, or a popular tourist destination in Florida, Hawaii, or Las Vegas, you may even have stayed at a condo-hotel. And if you did, someone earned part of the rate that you paid.

Condo hotels evolved an alternative to time-shares during the 1990’s and there are now 100’s of properties located throughout North America under brands including Hilton, Four Seasons, Clarion, and Ritz-Carlton. Even Trump has a few properties currently operating or under development.

Despite the fact that the property is in a hotel setting, a condo hotel is considered a private residence, and owners are eligible for mortgage interest deductions and other tax advantages that come from owning a second home. However, most properties do not allow you to live in the unit year round. This is because the management company does want to rent the unit when you are not there, so both parties can profit from the rental income.

Each condo hotel property has its own residence restrictions that indicate the maximum amount of time you can live in the property. This is an important piece of information to consider before purchasing a condo hotel unit. Most owners do not intend to live in their condo year round, so this is not a concern in typical circumstances but insure you are aware of potential restrictions before your purchase.

Anyway, if anyone has any questions about condo-hotels or fractional properties, please post them here and I will do my best to give you a prompt, reasonable answer. You can also click on the link in my signature below for more information and tips.