Condo hotels are one of the hottest products in today’s real estate market. New properties are cropping up in different parts of the country and new buyers are entering the marke daily. Things have been moving so quickly in terms of condo hotels, but sometimes it’s worth taking a moment to step back and look at the big picture.
Condo Hotels In General: There is a spreading enthusiasm about the condo hotel concept. More people are recognizing its potential and therefore creating demand for more inventories.
Condo Hotel Buyers: The average buyer is 35-50 years old. Buyers for Crown Regency Condo Hotel, come from all over the world.
The vast majority of buyers want condo hotel units primarily as investments and are focused on the potential for appreciation with the side benefit of hassle-free ownership. They see the ability to actually use their condo hotel unit as a vacation home as important but secondary to their goal of investment diversification.
Condo Hotel Market: Virtually every single property that has come on the market to date has sold out in pre-construction. Most of these properties are mega high-rise buildings or beachfront hotels with on average 200-500 units.
The speed with which these properties sell out is often as surprising to buyers as it is to the developers themselves. For example, the MGM Grand in Las Vegas, a 576-unit condo hotel, was expected to sell out in two years. It sold out in two months! The Platinum, a 255-unit property in Las Vegas, also sold out in just a matter of a couple months. Crown Regency Condo Hotel project, a 457-unit beachfront property, 35% of the units was sold within 8 months, and the current selling price is increased by 25% based on the launching price.
Hot Areas: In the U.S., South Florida continues to be an extremely popular area and one that has shown strong and steady appreciation. As already mentioned, the condo hotel trend which began in South Florida has now spread out west. Las Vegas is leading the pack with many new condo and condo hotel developments in all price ranges being built.
In Asia, Boracay Island is leading the famous and hottest tropical vacation area for international investors.
Brief background on Boracay
Boracay is a tropical island conveniently located at the northwestern tip of the Province of Aklan. Boracay is a coral island with a total land area of 1,083 hectares. This incredible island is 7 kilometers long, 0.5 kilometers at its narrowest and 2 kilometers at its widest, laced with a beautiful stretch of beach 4 kilometers long that is known for its powdery white sand unequaled not only in the Philippines, but anywhere else in the world.
Boracay is composed of 3 barangays in the Municipality of Malay which has a local population of about 13,000 whose main source of livelihood is tourism. The island was declared a tourist zone in 1978 and tourism development has expanded rapidly since that time.
Boracay is the Philippines number one tourist destination. The average yearly increase in tourist arrivals from 1998 to 2007 has been about 20%.
The Selling Process: A lot of properties take reservations of more than half the total project long before they’ve even prepared their purchase contracts. This means that many of the best units are reserved months before any money changes hands and often before even the first spade of ground has been turned over. Those early investors are seeing some amazing appreciation on their investments.
Prices: Like anything for which there is more demand than supply, prices keep going up, up, up. Developers often raise their prices 3-5 times from when they start selling until they sell out.
Developers are no longer discounting prices at the beginning of the selling process when they are anxious to get a few sales under their belt. This used to be common practice; it is no more because demand is so great.
There are sometimes, however, some price adjustments made at the very tail end of the sellout phase when developers want to close out their property and move on to their next project. Generally speaking, with regard to price, the best time to get in is usually early on in the first pre-construction offering.
Quality: Most condo hotels being built are of four- to five-star quality. The reason is two-fold: 1) There is demand for the types of services provided by four- and five-star properties, and 2) Oceanfront land is so costly that it makes more sense for the developer to put in a luxury property with units that he can sell at a premium price rather than lower priced units. In Crown Regency prime Condo Hotel project, there are four star quality studio units, loft units with swimming pool view and garden view, and luxury deck units on the third floor with private outdoor Jacuzzi and private garden.
Financing: It’s getting a little easier to get condo hotel financing. There was a time when most banks and mortgage companies weren’t even familiar with the term condo hotels. They now know it and also recognize the viability of these properties. They are more accommodating in expediting these loans. Crown Regency Condo Hotel in Boracay Island offers international investors flexible payment options and a 10% discount to their cash investors.
Contracts: Contracts that allow assignability have become rare. In the past, at some properties buyers could place a deposit on a unit in the pre-construction phase and then flip their unit prior to when they had to close. Developers now want to be sure that they don’t compete to sell their last few units with investors who purchased early at pre-construction prices and are now re-selling them at below the developer’s current prices.
Resales: Some condo hotel unit resales come on the market. Of course, this is to be expected. Some of the earliest buyers now want to move on to something or somewhere else. However, the resale market is still relatively small, and it’s hard to find a bargain.
Advice to New Buyers: How can buyers choose a condo hotel unit that will be a good investment? It’s best if they can work with a real estate broker who specializes in condo hotels and can make them aware of all products on the market. Aside from that, they should look for the following elements:
Location: Real estate is all about location. Beachfront properties in South Florida and Boracay Island have done exceptionally well in recent years. Their appreciation has been significant. If you prefer a property that is not on the ocean, it’s a good idea to select one in an area where you can expect to have business driven to your property, such as near a major convention center or in Downtown Miami near the financial district.
Management Company: Compare the management companies and their rental sharing program. You will likely feel more comfortable investing your money in a condo hotel with an experienced, top-notch management company vs. an independent operator. Also, it’s worth noting that an established management company does worldwide marketing and likely has a state-of-the-art reservation system that will help ensure your unit is rented as much as possible.
Daisy Guo
Fuente Triangle Realty Development Corp.
International Marketing Assistant
E-mail: ftrdcmarketing@gmail.com or info@cebucondoreview.co.cc
Cell: (+63917) 462-1174
Skype & Yahoo! Messenger: daisy_guo_onlinemarketing
My website: http://www.cebucondoreview.co.cc
My wordpress: http://daisyguoonlinemarketing.wordpress.com
part of the info are from http://ezinearticles.com/?Condo-Hotel-Trends—A-Look-at-the-Big-Picture-in-Vacation-Home-Ownership&id=553
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