Buying Condo In Hotel/Casino Resorts?

Question

Hi,I travel a lot and I need a bedroom to use every now and then in Nevada, and I'm considering Las Vegas because it has decent international flight connectivity. I've been perusing Zillow looking for creative approaches to buy a glorified bedroom that I can use when I'm in town, and rent when I'm away. I considered SFH where I'd rent out all the rooms and keep one to myself, but this seems risky since I'll realistically be away for months at a time and couldn't manage the unit/other tenants.Then I came across some listings that appear to be hotel rooms for sale, with basically the facilities I need (a bed, toilet, kitchen), a price point I can handle (270-500k$, I'd do 20% down), and fairly high HOAs (~1500$/m?). Are these possibly good (or not-terrible) investments for STR, considering my dual-use? I know there's STR restrictions in LV proper, but since this is part of a resort, I would assume the resort can rent my unit when I'm away? Do these pen out? What's the strategy for these?My alternative is renting a crappy bedroom from someone else, which seems to start at 900$/m down the drain, and leave it empty most of the time. If I can instead have a long term unit that nets some money when I don't use it, and I don't need to deal with a noisy roommate, that'd be better.

Jeremy Jareckyj · Answer

Yeah agree with John - that HOA might be a deal breaker..

John Underwood · Answer

I think the HOA fee will tank your profitability.

Run the numbers and see what you could bring in minus your expenses to see.

Anton Gerondine · Answer

Thanks all, I'll scrap that idea. Looks like a bunch of problems and I couldn't even get any info about the management agreement or the HOA rules from contacting sellers.

I'll think of something else. I'd rather not have a standalone unoccupied building sitting around waiting for squatters. But also don't want to buy something that doesn't generate income. And yet I don't have the time or the ability to manage STRs since I'm always gone. Conundrum.

Collin Hays · Answer

If you are "buying" a hotel-affiliated rental, the hotel is going to make all of the money. You are far better off buying a stand-alone vacation rental and paying for a hotel room when you need it.

V.G Jason · Answer

Are you talking about the one's sort of at the MGM, etc.?

If no, don't touch that at all. I don't know a soul who wishes they bought that and I know about couple of dozen folks that bought at a few of those each. Nothing but regret. It's all out of your control, and even though it's entirely passively managed it's a huge headache.

It's costs sometimes a lot more to get out of it, then you would think too.

Brett Deas · Answer

Having bought in HOA buildings, I will never do it again. There are lots of issues that can pop up that are out of your control with the HOA but affect your guests.

On a different level, STRs are seeing a flock towards uniqueness, and the commodity units are starting to struggle revenue wise. So I would be wary to buy a condo knowing this right now.

Lauren Kormylo · Answer

Condotels are also harder to finance, and therefore will be harder to sell to the next person when you want to do that.

Michael Baum · Answer

Hey @Anton Gerondine, I think the others said it well. That HOA is really high.

I wouldn't consider this an investment, but maybe a way to offset your costs.

You should contact the resort and get all the details on their rental program.

Look at a bunch of places and get all the info to help make the decision.

It might work out for you. At least you can offset the costs and have a place to hang.

Remember that these places might not have availability for you when you need it. Is your schedule set months in advance so you can get the time you need booked? Many of the managements of these resorts have pretty strict rules around use so make sure you take that into account.

Andrew Steffens · Answer

Agreeing with all above that the HOA (the size of a mortgage payment) will probably ruin it.  Also, I would look into how the rental program is.  Some condotels charge up to 50% to rent it out for you.

Zach Edelman · Answer

While the HOA might tank your profitability, I do know/am frequently messaged about condotels for STR usage, so it's definitely not that uncommon of a strategy.

Buying Condo In Hotel/Casino Resorts?

Most Popular Reply