Taj Hotels checks in at Saraya Islands

Taj Hotels, Resorts and Palaces has signed a management contract for a period of 15 years with Saraya Islands to operate Taj Exotica Hotel in Ras Al Khaimah, United Arab Emirates, which will become operational by end of year 2011. The Taj Exotica Resort and Spa will be one of six world-class 5-star hotels in the Saraya Islands. Saraya Islands is investing $2 billion for the whole project. This is going to be Taj’s fourth resort in the Middle East.

The project comprises four islands and a main village, occupying 5.5 kms of the island. The resort by Taj will occupy something around 45,000 sq mts.

The resort will include somewhere around 150 guest rooms including suites, 30 bunglows, two restaurants, conference facilities spa and other top-end amenities.

“It’s going to be a state of the art mixed-use resort destination in the Emirates of Ras Al Khaimah. It’ll have world class 5 star hotels, spread over the island; it’ll also have a residential area as well as a retail segment and water amusement park. Moreover, the island is well connected with Sharjah and Dubai International airports,” said Mahdhar Al Tamimi, general manager, Saraya Islands.

[Via - News upate from Financial Services]

Suite Deals: Investing in Hotel Rooms

Ever since Tony Kim flipped his "Starter Home" for an $80,000 profit six months after buying it, he's been on a perpetual hunt for new ways to milk the real estate market. He scored in the past five years with condos in Southern California and South Korea. Now he's chasing an intriguing new play: buying up individual hotel rooms.

A new way to play real estate

At first it might seem that Kim needs to call room service for a little reality soup. But in this time of real estate bubbliness, Kim and a growing number of others are discovering that the peculiar practice of investing in hotel rooms--"condo hotels," as they're known in the business--can provide potentially lucrative opportunities outside the froth-filled traditional housing market.

Over the past two years, Kim, a 43-year-old owner of beauty supply stores who lives in Omaha, Neb., has paid about $671,000 in out-of-pocket down payments for eight hotel rooms that are now valued at an estimated $6.7 million--about 40 percent more than their purchase prices.

The ability to buy ownership stakes in hotel rooms has been around for years. It's only recently become a popular way to finance new construction--and that's created investment opportunities. (A wealth of information can be found at www.condohotelcenter.com.)

Buyers find it appealing because initial capital outlays tend to be modest, since you can invest early in yet-to-be-built hotels. Moreover, unlike with traditional condos or vacation homes, there's no upkeep for the finished room. In addition to being able to stay in their rooms whenever they want, buyers can make money by leasing out the units to others.

Most hotel operators run services that will match rooms with customers and send a healthy fee to the room owner. James Dubois, a condo hotel investor in London, says he made a solid 6.7 percent return in the past year on his $410,000 purchase of a room by renting it out through the building's developer, GuestInvest.

The payoff

The larger payoff can come by investing in rooms in hot locations and hoping they rise in value--Kim's specialty.

In 2003 he put down a $10,000 deposit to reserve a small condo hotel room overlooking Lake Michigan in Chicago's Trump International Hotel & Tower. Over the next year, he put down an additional $79,000, or 15 percent of the nominal purchase price of $517,000. When the hotel building is completed, scheduled for 2007, he'll take out a mortgage.

Today, based on the value of comparable units, Kim's Chicago studio is worth about $1 million. "The beauty of condo hotels is there's no mortgage to pay until it's done," Kim explains. "You get in early and sit on it while it appreciates."

Since that first foray, Kim has bought two more condo hotel rooms in Chicago, four in Las Vegas, and one in Toronto. The asking prices for his eight rooms totaled about $4.7 million.

Though all the rooms are still under construction, the units today are worth an estimated $2 million more than Kim paid. Ultimately, Kim expects to sell some of the units to lock in the appreciation while retaining others for cash flow.

Joel Greene, president of Condo Hotel Center, says the big bet is that condo hotel rooms can be resold to affluent buyers looking for prestigious, no-hassle second or even third residences. Of course, investing in condo hotels does carry risks, especially given the long lag time (often four years or more) between the initial investment and the completion of a property.

Ford advises would-be investors not only to obey the cardinal axiom of all real estate investing--location times three--but to home in on properties run by highly acclaimed hoteliers. That will at least minimize the chance that investments will go south. And even if they do, at least the investor won't end up on the street.

"It's a calculated risk," Kim says. "But even if the worst-case scenario happens, I still have eight great hotel rooms to stay in."

Six Considerations to Selecting a Vacation Home

Selecting a second home deserves almost the same amount of thought and careful consideration as does your primary residence. After all, you want to ensure a future of happy vacations and, if you're like most people, prefer your investment to be one that appreciates over time. Give consideration to the following six key variables when selecting your vacation home.

1. Lifestyle. Most people purchase vacation homes to relax, entertain family and guests, and recreate. Almost any vacation property offers relaxation and entertainment, but recreation varies from place to place.

Consider whether you enjoy skiing, fishing, boating, snorkeling, surfing, golf, tennis, hiking, mountain biking or even sunbathing. Then seek properties at a destination that caters to your recreational preferences.

2. Objectives. What is your primary objective with this vacation home? Do you want to own a vacation home you'll use frequently or is it mainly a real estate investment that you'll hold for a while and then resell hopefully for profit?

Is it a place to bring the kids on holidays or is it a future retirement home? Is it a convenient location from which you can mix business and pleasure? Is it a place for the entire family or somewhere you can get together with friends for fishing or skiing?

3. Travel Distance. The amount of time and money spent traveling to and from your vacation property is an influential factor in determining how often you'll visit. The ideal travel distance is different for every buyer, but before you purchase, you must decide how much time and money you're willing and able to invest each time you take a trip to your vacation property.

4. Location. It is crucial to learn anything and everything about the city, town, and community of your potential second home. What are the prime and low seasons? What is the year round climate? How many of your neighbors are full-time residents? Is the area a prime tourist destination?

Is the community safe and kid friendly? Is the local lifestyle - dining,
shopping, entertainment, and recreation - affordable? The answers to these questions and others will help you assess whether a particular vacation property will support your desired vacation lifestyle.

5. Costs. In addition to the price of your vacation property, many other expenses accompany the rights to ownership. Taxes, insurance, utilities, homeowner association fees, landscaping, repairs, furnishings and property management can add to your monthly payments. Be sure to research all the costs associated with your vacation property before signing on the dotted line.

6. Responsibilities. What do you need to do to take care of your vacation home each year? Mountain homes are subject to frozen and bursting pipes. Beach homes can encounter damaging tropical storms. How often does your roof need to be replaced or the house need to be painted?

Maintaining and managing your dream home can be a second job. One option is to hire a full-time property management company. Another is to consider a private residence club or fractional ownership in which an on-site professional management company takes care of all maintenance issues.

Searching for and purchasing a vacation home can be a demanding process. Giving careful thought to the six key considerations above in selecting a vacation property will help ensure that your vacation property fits your needs and resources.

Condo Hotel Center can provide educational guidance and services to simplify the process. Tell us what you're looking for and we'll be glad to make some property recommendations.

[Via - Six Considerations to Selecting a Vacation Home]

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.