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Understanding condotelsBecause units can be rented for short-term stays, condotels are usually found in tourism hotspots. Each unit is privately owned with the option to be rented out to other individuals. Owners have access to the unit any time that isn’t already reserved for paid, short-term stays. Condotels are modeled after resorts and hotels. Amenities are designed to appeal to travelers: concierge services, full staff, housekeeping, pools and hot tubs, and fitness and recreation facilities.When a buyer purchases a condotel unit, they sign an agreement outlining the terms of ownership in their building. It’s a lot like the contracts found in gated communities with homeowner’s associations. Condotel buyers agree to conditions that keep the property operating like a resort, which sometimes means there are limits to living in a unit full-time. Owners are responsible for taxes, fees, insurance, maintenance and home improvements.
TakeawayAll condotels share these qualities:
- Owners can arrange for people to rent short-term stays in their unit.
- Owners are beholden to their building’s terms for rental agreements and are responsible for all maintenance and fees for their unit.
- Management provides amenities for short-stay visitors and owners.
In more detail:
What are the responsibilities of a condotel owner?Condotel owners have similar responsibilities to people that own an apartment in a city. They must follow the regulations of their building and pay to maintain their unit, including any taxes, insurance or fees that come with ownership. Utilities for the unit (like gas, internet, electric and cable) are charged to owners on a monthly basis, regardless of who’s staying in the unit. If an owner plans to rent their unit, they need to communicate those dates to the onsite management.
What does the condotel management do?Condotel onsite management has two primary duties: maintaining units and coordinating stays. Housekeeping falls under onsite management, as well as facilitating guest stays and bookings. Having staff deal with guests’ day-to-day needs ensures that condotel units operate like passive income.
What are the pros and cons of condotels?Pros of condotel ownership
- You own the unit and receive a deed.
- You have full control over when other people stay.
- You have potential for rental income from visiting guests.
- You have access to resort-style amenities year-round.
- Rental income is variable based on tourism popularity.
- Owners pay taxes, insurance, fees and improvements.
- Owners must abide by regulations in the building’s rental agreement, which can be strict.