Answer: Generally speaking, condo-hotel purchases are not good investments. Instead, you could be earning 7 to10 percent on a well-diversified portfolio of stocks and mutual funds or 4 to 6 percent on a normal rental-property investment. Additionally, there are tons of financial risks with condo-hotel investments.

Are condos safe investments?

Let’s cut to the chase: Yes, condos are a fine investment. You just don’t want to get a junky one that’s poorly managed. Don’t get us wrong: Buying a condo is still one of the most expensive purchases you could ever make. But a condo is typically tens of thousands of dollars cheaper than a single-family house.

What does hotel/condo mean?

A condotel is a condominium project that is operated as a hotel with a registration desk, cleaning service and more. The units are typically individually owned. Unit owners also have the option to place their unit in the hotel’s rental program where it is rented out like any other hotel room to paying guests.

Are there any risks in owning a condo?

Additionally, there are tons of financial risks with condo-hotel investments. First, there are risks when buying into an HOA community. You also have the risks that come with owning part of a hotel such as a downturn in the economy or poor management of the property.

What makes a condo hotel a good investment?

Stunning architecture, world-class amenities, room service to your residence at any time – these features of condo hotels are quite enticing and seductive, aren’t they? Throw in consistent monthly cash flow while you are unable to use your unit, and this formula of homeownership sounds quite attractive.

What are the risks of owning a hotel?

You also have the risks that come with owning part of a hotel such as a downturn in the economy or poor management of the property. Lastly, the allocation of expenses between the condo-hotel units and other portions of the property – such as a developer-owned hotel or retail space – presents a risk.

Do you have to be a property expert to invest in hotel rooms?

Hotel room investments do not require a property investment expert to figure out – these investments have the same fundamentals as a buy-to-lets. Essentially with a hotel investment, you are purchasing a hotel room and putting it up for let.