Condotel Anyone?

[aaronc879]

Has anyone purchased a condotel. I'm looking into the possibility since I would like to spend winters in Florida. For those that don't know a condotel is a hotel room that you purchase. You are the owner of the room and can use it whenever you want. When you're not using it the hotel management will rent out your room. Seems like a fairly low cost way to spend winters down south. Anyone have experience with this? Here is an example. This is not one that i'm considering but it'll give you an idea.

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[Letj]

I invested in one in Myrtle Beach just before the real estate crash and it was bar none the biggest mistake I've made in my life. The hotel operator takes 50% of your revenue and the HOA fees on a one bedroom is over $500. It is a bottomless money pit. The latest thing is a special assessment for elevator installation. I have been stuck with this albatross for the last seven years just dumping money down the drain. There is no way to get out of it since it lost 60% of its value and has not recovered.

[aaronc879]

Quote:

Originally Posted by Letj I invested in one in Myrtle Beach just before the real estate crash and it was bar none the biggest mistake I've made in my life. The hotel operator takes 50% of your revenue and the HOA fees on a one bedroom is over $500. It is a bottomless money pit. The latest thing is a special assessment for elevator installation. I have been stuck with this albatross for the last seven years just dumping money down the drain. There is no way to get out of it since it lost 60% of its value and has not recovered.

I figured there had to be a catch. You don't get to own a place right on the beach for $40K without there being a catch. You don't make it sound very attractive. Maybe i'll have to buy a manufactured home in a gated community a little further from the coast.

[Letj]

Quote:

Originally Posted by aaronc879 I figured there had to be a catch. You don't get to own a place right on the beach for $40K without there being a catch. You don't make it sound very attractive. Maybe i'll have to buy a manufactured home in a gated community a little further from the coast.

Yes, there is a catch. They need new owners to keep paying the HOA fees. My guess would be that this $40K unit was $150K not too long ago. I would not be surprised if it's owned by the HOA because the owner stopped paying HOA fees. Everybody else makes money from the association manager to the hotel operator except the owner. I have other properties to compensate for the loss on this one. It does however provide me with some nice tax deductions even though I am still out of pocket quite a bit.

[Meadbh]

Quote:

Originally Posted by aaronc879 Has anyone purchased a condotel. I'm looking into the possibility since I would like to spend winters in Florida. For those that don't know a condotel is a hotel room that you purchase. You are the owner of the room and can use it whenever you want. When you're not using it the hotel management will rent out your room. Seems like a fairly low cost way to spend winters down south. Anyone have experience with this? Here is an example. This is not one that i'm considering but it'll give you an idea. REALTOR.com - Real estate listings & homes for sale

One of the major high end hotel chains was planning one of these in my area some years ago, so I went along to the presentation centre just for fun. The business model made no sense to me as a potential owner. I guess I was not alone, because the project literally never got off the ground. It was quietly cancelled.