Condo Hotels for Second Homes

Vacation Homes, Retirement and Investment

Considering buying a second home or vacation home? Great idea! You’re about to join one of the fastest growing trends in the United States and the world. And, if it’s a condo hotel unit that you’re thinking of, then you have a unique opportunity to get in on the ground floor of a very exciting, new type of real estate investment, one that shows tremendous potential for the future.

Why are condo-hotel units garnering such rapid appeal as vacation homes? Take a look at this list of the top ten reasons, and then we’ll go into more detail on each one.

Top Ten Reasons to Buy a Condo-Hotel Unit

1. Vacation “free” any time.
2. Enjoy Luxury Accommodations.
3. Avoid maintenance headaches.
4. Secure your place in the sun.
5. Generate rental income.
6. Get in on the bottom of the condo-hotel craze.
7. Gain appreciation potential.
8. Secure easy mortgage financing.
9. Save on taxes.
10. Diversify your investments.

1. Vacation “free” anytime.
When you own a condo hotel unit, you can use it as a vacation home anytime, unlike timeshares when you can only use your property one or two weeks out of the year.

2. Enjoy luxury accommodations.
Most condo hotels are first-class, extremely luxurious properties with numerous amenities. They are operated by the best, most respected names in the hospitality business such as Marriott, Hilton, Ritz Carlton, Starwood and Sonesta.

3. Avoid maintenance headaches.
Unlike owning a second house or a condominium, when you own a condo-hotel unit, you never have to worry about repairs and maintenance. The management company handles it all for you. You enjoy all the fun without any maintenance headaches.

4. Secure your place in the sun.
Places like Miami Beach, Fort Lauderdale and Key Biscayne are completely built up. Oceanfront property is a very limited commodity. If you want to know that you’ll always have a place to come for recreation and even retirement, the time to buy is now.

5. Generate rental income.
When you’re not using your condo hotel unit, you can allow it to go back into the hotel’s rental program. The hotel management company is responsible for renting it out for you. The revenue is usually split evenly after some adjustment for expenses. Part of the beauty of condo-hotel unit ownership is that you never have the bother of finding tenants or dealing with them.

6. Get in on the bottom of the condo-hotel craze.
The concept of condo-hotels as vacation homes is fairly new and not very well known…yet. However, every indication is that condo hotels are here to stay. Already the success seen in South Florida where the concept originated is now spreading to places like Las Vegas and Orlando.

Investors who take the plunge early have an opportunity to get in before word spreads and more buyers come on the market and drive up prices. Furthermore, unlike timeshares which are virtually impossible to unload, the resale market for condo-hotel units looks exceptionally promising.

7. Gain appreciation potential.
Those same baby boomers who drove up housing prices from Los Angeles, California to Burlington, Vermont are now entering the second home and retirement home market in vast numbers. In addition, the post-boomers are getting in on second home ownership. They see second homes as the newest symbol of status, the best way to reduce stress, and a direct route to quality family time.

And let’s not forget international buyers. The British, Mexicans, Latin Americans and Canadians as well as affluent citizens from many other countries are shopping the U.S. for second homes.

So when thinking about appreciation potential for a second home, gaze into that crystal ball and you’ll see that it clearly reveals a rapidly growing number of people with the desire, income, wealth and borrowing power for acquiring second homes. There’s little doubt that in the future the prices of properties that are located in popular areas like Miami Beach, Key Biscayne and Fort Lauderdale will make today’s prices look like bargains.

8. Secure easy mortgage financing.
Lenders like the condo hotel concept. They are ready, willing and able to make mortgages on condo hotel units as second homes or vacation homes.

9. Save on taxes.
Owning a second home opens an array of possibilities for additional federal tax deductions and tax-sheltered (or tax-free) income. In some cases, you can even reduce or eliminate various property taxes, income taxes and other fees levied by state and local governments. Naturally, you should discuss your own situation and tax-saving possibilities with competent tax counsel.

10. Diversify your investments.
The ups and downs of today’s stock market is dizzying. With strong appreciation of second-home prices expected in many locations, you might consider diversifying your investment portfolio with real estate ownership-especially real estate that will add happiness to your life. If the stock market drops, your second home will not only help preserve your net worth, it will give you a fun place to vacation.

[Via - Condo Hotels]

Private Residence Clubs & Fractional Ownership Offer an Appealing Lifestyle

Being pampered is a part of the resort experience for many vacationers. Impeccable service is what often leads them back to top hotels again and again.

Those who prefer a private residence in their getaway locations can choose from an array of housing options. But they'll have to make their own dinner reservations and contact the plumber themselves.

But what if you could own a private second home in those beach and mountain locales and still be treated as if you were at the Ritz? That's the idea behind residence clubs, one of the fastest-growing segments of the vacation-home business and one that hotel operators -- including Ritz-Carlton -- have embraced.

"We're selling a lifestyle along with the house," said Alan Fuerstman, chief executive of Montage Hotel & Resorts, which is building 14 villas and offering 14 additional home sites at its Montage Resort & Spa in Laguna Beach, Calif. "You can get room service, use of the spa and pool, and have our chef coming over to do a dinner party for you."

Those home sites, some of the last oceanfront property available in Southern California, don't come cheap: $4.5 million to $6.5 million for the lot alone. (Nine of the 14 are still for sale; the 3,000-square-foot villas are sold out.) But they represent a way for resort developers to make their high-cost projects more economically feasible, one of the reasons the concept has become more popular.

"We're in the process of putting together a development in the [California] mountains, and we see this working wonderfully there," Fuerstman said. These buyers are younger than we would initially have thought. But what we find is that the buyer who falls in love with these properties has stayed in the hotel once or twice and wants to embrace that lifestyle, capture it on a daily basis," he said.

The Residences at Montage represents the latest in the evolution of the hotel industry in the second-home market. The villas and home sites at the Laguna Beach property are being sold outright to buyers, not as time-share or fractional-ownership units.

It has been 20 years since Marriott became the first major hotel chain to enter the vacation-ownership business with its purchase of American Resorts. That initial foray involved time-shares that were sold as a right to use a condominium unit for a specified time, generally one week of the year.

Marriott

Marriott still operates two brands that sell traditional time-shares: Marriott Vacation Club International and the more moderately priced Horizons by Marriott Vacation Club. Owners are able to trade weeks in order to vacation in a large number of destinations.

In 2001, Marriott added its Grand Residence Club concept. The first club opened in Lake Tahoe, Calif., in 2002 and the second in London last year. The clubs combine fractional ownership of a second home with the amenities and service of a luxury resort. Fractions from three weeks to 13 weeks range from $83,900 to $550,000.

The hotel company also operates the Ritz-Carlton Club, another fractional-ownership product where buyers can purchase interests from 21 to 35 days per year for $98,000 to $490,000. Ritz-Carlton Club resorts are located in Aspen and Bachelor Gulch, Colo., St. Thomas and Jupiter, Fla.

In addition, the Residences at the Ritz-Carlton offers for-sale condominiums at 11 U.S., Caribbean and European destinations that provide concierge, dining and butler services.

Four Seasons

High-end hotelier Four Seasons also has been developing private residence clubs. It has fractional-ownership properties in North San Diego, Calif.; Scottsdale, Ariz.; Jackson Hole, Wyo.; and Punta Mita, Mexico, near Puerto Vallarta, which is under development.

And Hyatt Vacation Ownership, an affiliate of Chicago-based Hyatt Hotels, has broken ground in San Antonio, Texas, on what will be its 11th vacation ownership property; eight are open and two others are slated to open this summer.

Exclusive Resorts

Not all the hotel-type developments involve hotels, though. Exclusive Resorts, founded by Brad Handler, a member of eBay's startup team, offers a collection of luxury vacation homes that members have access to. The company has more than 200 homes in 25 locations worldwide, with 12 additional sites planned.

The homes average about $2 million, but members pay a one-time deposit of $375,000 to join, plus yearly dues that the company describes as "modest." Exclusive Resorts' members can use a member-services manager to make travel arrangements and have access to an on-site concierge in their destination.

Members can also take advantage of Exclusive Resorts' strategic partnership with Marquis Jet, which provides access to the NetJets private jet fleet.