When it comes to real estate, most people are familiar with traditional condominiums and hotels. But there’s a unique property type that combines elements of both: the condotel. Short for “condominium-hotel,” this hybrid ownership model is gaining traction in popular tourist destinations and resort areas.
The Basics of a Condotel
At its core, a condotel is a condominium project where each unit is individually owned. What makes it stand out is the ability for owners to rent out their units to short-term guests, much like a hotel room. These properties are typically part of a larger, resort-style building that includes:
- A front desk and check-in service
- Housekeeping staff
- Concierge services
- Onsite amenities like pools, gyms, and restaurants
This blend gives owners the flexibility of enjoying their unit as a vacation home while also generating income when it’s not in use.
How Condotels Differ from Traditional Condos
While condotels and traditional condos share the concept of private ownership, they operate quite differently. A traditional condo owner typically has full control over how their property is used. Renting it out often involves long-term leases or independent management.
In contrast, condotel units are built with short-term rentals in mind. They’re managed much like hotel rooms, with professional staff and systems already in place. This hands-off rental approach is a significant advantage for owners seeking income potential without the hassle of managing tenants or daily turnover.
How Condotels Differ from Hotels
Hotels, on the other hand, don’t offer private ownership. Guests pay nightly rates, but the property is owned and operated by a single company. Condotels flip this model: the property is divided into individual units, each owned by separate buyers.
However, to the guest, staying in a condotel feels almost identical to a hotel experience. They enjoy the same front desk check-in, housekeeping, and resort-style amenities. The only real difference is that the nightly rate they pay benefits the unit owner (minus management fees).
Benefits of Owning a Condotel
For many investors and second-home buyers, condotels provide the best of both worlds. Key benefits include:
- Income Potential: Earn rental income while not occupying the unit.
- Turnkey Management: Professional onsite staff handle marketing, booking, and cleaning.
- Vacation Flexibility: Owners can reserve time to use their property as a personal getaway.
- Prime Locations: Most condotels are located in high-demand tourist destinations, ensuring strong rental demand.
Things to Consider Before Buying
While condotels offer unique opportunities, they also come with considerations:
- Financing Challenges: Lenders may have stricter requirements for condotel mortgages. Working with experienced professionals, such as Rodrigo Ballon Crosscountry Mortgage, can help simplify the financing process.
- Association Fees: Maintenance and amenity fees may be higher than standard condos.
- Rental Revenue Splits: Management companies often take a percentage of rental income.
- Market Fluctuations: Like all real estate investments, condotel profitability depends on tourism demand.
Is a Condotel Right for You?
A condotel might be an excellent choice if you’re looking for a property that doubles as both a personal vacation retreat and an income-generating asset. With the right location, financing, and management, it can provide flexibility and value unmatched by traditional condos or hotels.
For buyers who value convenience and want the security of professional onsite services, condotels are a compelling alternative to more traditional forms of real estate investment.
