Looking for a Hands-Off Vacation Rental? Consider a Condo Hotel

Some people would like to own a vacation rental but don't have the time to manage one. They can hire a management company like Evolove or BongoStays to manage it for them. However, you will still have to be involved in setting up the unit and getting it ready to be rented out. 

Consider the concept of a Condo Hotel, a.k.a. Condotel. Although the ways a condotel varies by project. 

Here are the pros and cons to consider when going down this route. 

Pros:

You get a furnished unit that is turnkey. From beds to spices, all you have to do is, well, nothing. 

Similar to a hotel, the association will advertise your unit, manage bookings and provide 24 hour room services. 

No need to be involved in any repairs.

No need to try and add unique touches to the unit. As the company wants to advertise standardized units they won't want you to make your unit loook any different then your neighbors. This gives them the flexibility to assign any room they wish when someone books a unit.

If you decide to sell at any point, it won't feel like you are selling something that you invested time in, as you esentially got it with no effort. This will allow you to make a snap decision if the profits generated are not to your expectations. 

Cons:

Unlike a regular vacation rental, they will cap the amount of time you can spend at your place per year. The reason they do this is because they get a percentage cut of the gross revenue generated by your unit. If you occupy your unit for most of the year, that decreases their ability to charge management and cleaning fees.

You cannot list your unit on sites like Airbnb. THEY control the listings and pricing.  The only control given to you is when to have your calendar blocked when you want to stay. Make sure they don't charge you when you want to stay there yourself. You ARE the owner after all!

When trying to sell, if there are other units being sold by the management, you may have a hard time competing against them to get your unit sold. 

The way you generate profits may vary. They may take all the profits generated (after deducting their fees) and split them evenly across all condo owners, or they may pay out your profits based on the occupancy of your unit. 

High HOA fees. Some of these Condotels have extremely high management fees. 

Whether looking for this option in Miami or Mexico, make sure you do your due diligence before purchasing a condotel.