Condo hotels are back!

The concept that had been popular in the early 20th Century in urban markets and at the shore in the mid-80's and early 90's are once again "hot" investments as more people look for ways to invest in the shore economy.

The concept of condominium hotels was resurrected out of necessity as hotel developers look for innovative alternatives for building and renovating lodging properties. Condo ownership provides an excellent option for creating capital and finding investors to money into the project by purchasing units at prices that reflect exploding property values. There's demand for the product for several reasons including availability of multiple owners/investors and the fact that high land costs are spread amongst multiple units as common property belonging to all owners. This is particularly useful in beachfront locales where land costs are high and development loans expensive.

Also, condominium hotels can sell units pre-construction and use proceeds from the sales to pay down construction loans and costs of new construction or renovation. This ensures income early in the development process so the property operates debt free as both residence and hotel.

These days, the logistics of condominium hotels are a bit more complicated. Not all condominium hotels operate the same. In fact, there are several different types of "condo hotels" out there including:

• Structures with condominiums and hotel units in the same building with only the hotel units being rented as transient lodging.
  
  
• Buildings with condominiums and hotel units, both of which are rented out as hotel units when the condo is not in use by their owners.
  
  
• Structures with 100% condominiums that are all rented out as hotel units when not being used by their owners.

The need to deal with multiple owners through an association rather than with a single owner is another challenge of this form of ownership. For these reasons, it is important to team up with an experienced condo hotel operator that understands the advantages and challenges inherent in hotels with a condominium form of ownership.

Don't overlook this valuable alternative when considering sales or construction of motel property.

Do you want to invest in individual condominium units or convert your lodging property to the condominium form of ownership? Contact Ocean Property Management Corporation today. We specialize in operating this type of building.

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