Investing in Condo Hotel but from ground up

[Caroline Smith]

Hi All,

I am a newbie on Condo Hotel investments. I have come across investing in a resort that is being built from the ground up. Can anyone advise what sort of important details I should be looking into so I don't get caught up with regretting the purchase? I know I should be looking at HOA and all property management fees, Location, buy laws, sales contract. But, this is not a standing property as of yet and it is supposed to have many amenities. It is supposed to be a 5 star hotel. What sought of details should I look into in this type of prospective investment? Thank you kindly.

[Collin Hays]

I never advise investing in a condo. Condos are commodities, and when supply exceeds demand - which is most of the time - they will not rent for practically any price.  We have a very nice condo on our program with a ton of amenities and great views. We almost can't rent it for the cleaning fee.  

Why is that?  The answer is in your post:   "It is supposed to be a 5-star hotel."  So the fancy hotels will be your competition. Except they deliver a lot of amenities that you cannot:  Valet parking, room service, bell service, concierge, restaurants, coffee and liquor bars, meeting spaces, gift shops, and daily maid service.

And within five years, your condo isn't kept up to the standards of the Hiltons and Marriotts surrounding you, while your HOA keeps going up.