If you are a regular visitor to South Florida, perhaps you have stayed at some of our region’s beautiful condotels. If so, you may wonder whether it would be worth it to invest in a condotel unit. After all, you are already paying to stay in the condotel while you are in the area, so why not choose a unit to make your own, and maybe earn some extra money from it?
A condotel in Miami or the surrounding region can make a great investment. But before you move forward, you need to weigh the pros and cons. This will help you decide whether investing in a condotel is a fit for you.
Pros of Buying a Condotel:
- A condotel is a “best of both worlds” unit. Buying a condotel unit is like owning a condominium, but you get to enjoy the conveniences of a hotel. In many cases, that means access to all the same amenities that hotel guests get to use. Management will generally take care of maintenance issues, making a condotel relatively “hands-off” to own.
- You get to decide how you use your condotel. Many people purchase condotels to live in part-time. They vacation at the condotel for a few weeks or months, and then head home for the rest of the year. You can however purchase a condotel simply as an investment and not live in it at all. Alternately, you also have the option of living in your condotel unit year-round. This makes it a very flexible purchase.
- Investing in a condotel can be affordable and convenient. Tally up the hotel rates and other costs associated with long-term trips, and you will discover that they add up fast. In the long run, investing in a condotel can save you money on your regular trips. It can also streamline your trip planning. Your condotel will literally be your home away from home.
- You can rent out the condotel when you are away. One of the best things about owning a condotel unit is that you can rent it to guests when you are not staying in it. This gives you a stream of income which can offset the maintenance costs.
- Over time, the value of your condotel may increase. That means you may be able to earn more in the future renting it out. If you decide to sell it at some point, you may also be able to do so at a profit.
Cons of Buying a Condotel:
- Condotel rentals and earnings are driven by the seasonal market. If you stay in your condotel on-season and then try to rent it out off-season, you may have a tough time filling it. If you can do so, it may be at a reduced off-season rate.
- Fees tend to be on the high side. Maintenance fees for condotels are notoriously high, often in the range of $1-10 per square foot per year. There are additional costs you may need to pay as well, such as a fee for housekeeping.
- Taxes may be high. Condotels tend to be taxed under commercial rather than residential codes. That means that your taxes may be higher for a condotel than they would be for a similar condominium unit.
Lending Bankers Mortgage Specializes in Condotel Loans in South Florida
You now are aware of some of the advantages and drawbacks of investing in a condotel. Financing a condotel is different from financing a condominium, so it is important to work with a mortgage company that is experienced with condotel loans. At Lending Bankers Mortgage, this is one of our specialties.
Ready to buy your own condotel in South Florida, or just want to ask some questions? Give us a call today at (786) 220-1100 We can help you figure out whether investing in a condotel would be a good fit for your financial goals and can connect you with a competitive loan.