Real estate is a driving force in the economy. For an entrepreneur or an investor, big or small, it can be a lucrative business which brings in some serious profit if done correctly. While there are many ways that one can make money from a real estate investment, condotel investing is rather unheard of yet it is an up-and-coming business venture which is definitely worth a look.
What is a condotel?
It’s a simple concept. A combination of a condominium and a hotel. In this set-up, condominium units are being pre-sold to investors, much like a regular residential condominium. Once the project is complete, the developer brings in a property management team who will run the building as a hotel, which includes set-up, marketing, and everything else.
How does it work?
Once the condotel is up and running, units will be rented out to transients, vacationers, and other paying guests. Just like any other hotel, property management will add features such as a concierge, housekeeping, amenities, and so much more. As a unit owner in this set-up, the biggest advantage would be not having to bear the grunt of setting up your unit, marketing to attract guests, welcoming guests upon arrival, then cleaning up right after. Unlike other condominium short-term stay platforms, you won’t have to worry about a thing as your property management team will take care of everything for you.
Where does the money come in?
As a unit owner of a condotel, you are considered a shareholder and will therefore receive part of the hotel’s revenue. This steady influx of income would depend on agreements with the property management team of course, but a common set-up would be an agreed percentage of the revenue to be split between unit owners and property management. Revenue will be largely dependent on the occupancy of the condotel. The higher the occupancy rate, the bigger the revenue, so it’s important that the property you choose to invest in is in a great location and includes attractive amenities, and the developer and management team you’re working with will ensure excellent marketing and customer service. The key? Due diligence.
ARE CONDOTELS WORTHWHILE INVESTMENTS?
The answer is a big YES.
Why?
While there is a whole list of factors that will play a role in determining how much your returns will be on a regular basis, the beauty of this investment is that while you’re expected to be earning steadily, you know your property is slowly appreciating in value, so if at some point you decide to sell, you would be able to sell with profit. Furthermore, if you hold on to your property and partner with a trusted property management team, you know you would have a steady cash flow. Cash flow that you can actually use to offset your monthly ownership expenses, and even earn some profit along the way. All while your property value continues to grow.
The icing on top of the cake?
Whether you live close to the property or outside the country or wherever, you can take part, and just let your money work for you, which is a great example of an ultimate passive income. So again, a huge resounding YES. Condotels are worthwhile investments.
