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Perhaps
you've heard all the buzz about condo hotels, and now
you're considering this type of real estate investment.
Condo hotels offer you the opportunity to own a luxury
vacation home at a world-class resort and to receive
rent revenue when you're not using it.
Buy
a condo hotel in a rapidly-emerging country like Dubai,
where annual hotel occupancy rates average close to
90%, and suddenly a vacation home can make good financial
sense as well.
Condo hotels are not your typical vacation homes. They
are exquisitely-furnished condominium suites in ultra-luxurious
hotels and resorts. Most properties are usually of four-
or five-star caliber.
In
Dubai, the majority of condo hotels are large, high-rises
with state-of-the-art amenities like full-service spas,
health and fitness centers, fine dining restaurants,
resort-style pools and sophisticated business centers.
They also offer an expanded array of services such as
a concierge, valet and housekeeping.
Condo
hotels are currently being developed in and around Dubai's
business
district and also in Dubailand. They will cater to business
travelers as well as tourists from all over the world.
As a condo hotel unit owner, you have the option of
putting your condo unit into the hotel's rental program
when you're not in residence. This is what makes the
condo hotel concept so attractive.
While
the developer doesn't guarantee the rental of your unit,
by capitalizing on a hotel's name recognition, advertising,
national affiliations, centralized reservation system
and management expertise, you can expect to receive
a higher level of rental income than you would from
a traditional vacation home. In addition, the on-site
management company will take care of all maintenance
of the property and ensure the smooth operation of its
many amenities and services.
As part of the rental agreement, the hotel pays for
most operating expenses such as housekeeping, administrative
and marketing costs. As the condo hotel owner, you would
be expected to pay for real estate taxes, insurance
and capital improvements.
Occasionally
developers in Dubai, in an effort to encourage foreign
investment, offer incentives such as giving a buyer
a guaranteed annual return of as much as 8%. Or they
may offer an attractive rental split that exceeds 50%-50%.
For
buyers interested in the investment potential of a condo
hotel, the emphasis, however, really shouldn't be on
the annual revenue the unit generates but rather on
long-term appreciation.
A condo hotel unit in a first-class
resort that is located in an emerging nation like Dubai,
has potential to significantly increase in value. Those
buyers who purchase condos in early pre-construction
phases will likely see the greatest appreciation of
their investment.
Prices for condo hotels in Dubai range from $200,000
to over $1 million for prime properties. To learn more
about individual properties, particularly those in early
pre-construction phases, contact Condo Hotels Dubai
at info@CondoHotelsDubai.com.
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