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5 Things To Know About Investing In Condo Hotel Properties
Dated: January 2 2022
5 Things to Know About Investing in Condo-Hotel Properties
If you've been thinking about adding a vacation rental property to your real estate investment portfolio, condo-hotels may be a unique type of property that’s worth considering.
Condo-Hotels may look like your average condo, but can differ in many ways. It’s important to understand the differences between a traditional condo real estate investment and condo-hotels before making the decision to purchase one. Read below to find out the top 5 things you’ll want to know about condo-hotels before you pull the trigger on your next investment purchase:
Condo-Hotels Often Offer Onsite Property Management Services- Having an onsite property manager can make renting out your new vacation property simple and hassle-free. However, it’s important to know that the majority of condo-hotels charge a fee for this service. Many communities in the Tampa Bay area and around the Pinellas County Beaches charge around 50% of the rental amount to manage and rent out vacation properties.
Resort-Style Amenities Are an Added Bonus in Some Communities- Most investors not only want to get a nice return on their investment, they also want a property they can enjoy when they’re ready for their own vacation. Properties like the Bilmar Beach Resort on Treasure Island Beach offer 2 heated pools, restaurants, laundry & fitness facilities and more that can make your condo-hotel investment appear more like a resort getaway than your average condo rental property.
Condo-Hotels Are Often Located in Prime Locations- Properties like the Barefoot Beach Resort in Indian Shores offer access to some of the best beaches in Pinellas County, just steps away. Some units in this community even offer deeded boat slips that can be used to store your boat or rented out to other local boat owners for additional monthly income. Unlike many other condo-hotel resorts, this one will even let owners claim the property as their full-time homestead by the beach. (**Many Condo-Hotels DO NOT allow owners to live in the unit full time and only allow them to reside there for a specific number of days each year)
It Can be Tough to Get Financing on a Condo-Hotel- Due to the fact that the majority of condo-hotel properties are owned by investors who cannot claim the properties as their full-time homestead, lenders will often not be able to offer mortgage loans on condo-hotels. While it's true that some smaller banks, such as Bank OZK (in the Tampa Bay Area) have been able to offer portfolio loans to purchase these types of properties, many traditional lenders simply can't get Fannie Mae approval for loans on Condo-Hotels. Potential buyers should be prepared to pay cash or talk with a local lender in advance to see if they can really finance the purchase.
Condo-Hotels Are Often Cheaper Than Traditional Condos in the Same Area- Due to the limited buyer pool of cash or portfolio loan buyers, condo-hotel units often sell for less than a traditional condo in the same area and similar in size. This is also because management fees can be higher at condo-hotel properties and owners cannot typically reside in a condo-hotel unit full time. However, the lower purchase price can offset some of the higher fees, making the annual returns similar to a more traditional vacation rental property investment. When purchasing a condo-hotel unit, it's important to look at the income history and the price appreciation the unit has achieved over time for the current owner.
With this in mind, if you think a condo-hotel unit might be the perfect investment for your real estate portfolio, give us a call at The Sandy Hartmann Group so we can help you find the perfect vacation rental property for your needs! We've been selling vacation properties in Pinellas County and Tampa Bay for over 35 years and have a vast amount of knowledge when it comes to the best real estate investments around Tampa Bay.
Call us today at (727) 400-3315 or message us now.
Andrea is the Managing Partner of The Sandy Hartmann Group and runs the team alongside Sandy Hartmann. She would love to talk to you about real estate! Andrea was born and raised in the Tampa Bay a....