Are Condo Hotels What the Orlando Real Estate Investor Has Been Looking For?

Earlier this year the Hawthorn suites in Lake Buena Vista quietly sold out all of their units in less than a month. These 540 sq. ft. units were an investor's dream, with a price tag in the mid $100's and an area average occupancy of over 84% these properties to quote one of our investors "make perfect sense".

Many of the people buying these condo hotel conversions had different motivations for buying a second home in Orlando, but all had the same reason for buying a condo hotel conversion, namely the opportunity to cover their running costs with minimal or no effort. Many had sold their single family homes in Orlando, cashed in on the rapidly increasing prices and than reinvested their earnings utilizing a 1031 exchange and bought several condo hotel units. Others simply wanted an affordable second home near Disney which they could use when they wanted, and let the onsite management company rent it for them when they are not using the property.

So the big question is what are the benefits of a condo hotel?

There are many! What most people do is have the management rent the units out for them to offset the costs, and sometimes even creating a positive cash-flow. If you feel like going on vacation, you just call up the management company and let them know that you'll be using your unit on specific dates, and they set it aside so no-one else uses it.

Condotels also have been appreciating in value at rapid rates in the last few years. Many investors have made incredible profits just purchasing and selling these units, which is known as flipping.

And don't forget about the amenities! Think of all those amenities you have when you go to a luxury resort. Many condotels have pools, spas, tennis courts, restaurants, bars, saunas, playgrounds, and more. Keep in mind, however, that different establishments offer different types of amenities and you should research them before assuming that they have everything that you want. Many of the cheaper condo hotel conversions may not have some of these amenities, but if the price tag is less than $200,000, many people can forgo the spa!

For the condo buyer, these types of developments can offer enhanced financial returns when owners choose to place their units in a rental pool. Individual owners usually can put their units in the hotel-room rental pool while they're not using them and get a portion of the proceeds. Better yet, they get access to the same amenities and services as hotel guests.

By capitalizing on a hotel's reservation system, brand recognition and management expertise, unit owners are more likely to receive a higher level of rental income through a rental pool agreement with a recognized professional operator, despite having to share a portion of their units' revenues. Due to the high demand for accommodation near the theme parks, many hotels are dropping their branding as the hotels are showing good occupancy without the extra cost of paying for a brand name.

If you think that a condo hotel near Disney might be for you, or if you want to research condotels more, please visit http://www.orlandocondohotel.net

Marcus Truett is a second home specialist with the office of Ronald P Bressan Real Estate. Visit Marcus Truett's condo hotel website at http://www.Orlandocondohotel.net

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