You are here: Home / Uncategorized / Condo hotels a bad idea?

Condo hotels a bad idea?

December 13, 2006 By 9 Comments

Forbes takes a look at the condo hotel trend, A Room Of Your Own and finds that it might not be all that it is cracked up to be:

Kearney bought his room at the W Las Vegas for $493,000 (his broker got him in before units went on sale to the public for $650,000). If he snags a five-year interest-only loan, common for condo-hotels, he’ll pay $23,664 yearly. Once the hotel is built, he must shell out for a condo fee ($6,000), insurance ($250), a furniture replacement fund (5% of gross rentals) and taxes ($4,930). Then add $40 for maid service each day it is rented. Now assume the room is full 75% of the year, at $270 per night. He collects just 55% of rental income, or $37,000. Result: He’ll be $12,500 a year in the hole.

Filed Under: Uncategorized Views: 531
About Matt

Matt , Urbnlivn's publisher, has a love for lofts with industrial features and new construction condos that is only eclipsed by his passion for outdoor sports and urban living. Phrases such as “polished concrete” and “exposed brick” are music to his ears. You can also find Matt on Twitter or skiing.

  • Turk

    Had 10% down on a $1M unit at the W Las Vegas, but after reading this article, decided to back out. Fortunately, hadn’t yet gone to hard contract and was able to get the entire deposit refunded. The idea of a condotel seemed appealing, but there are too many uncertainties (rental rates, occupancy, fees) to make this a sound investment. I’m glad this article came out when it did…

  • Turk

    Had 10% down on a $1M unit at the W Las Vegas, but after reading this article, decided to back out. Fortunately, hadn’t yet gone to hard contract and was able to get the entire deposit refunded. The idea of a condotel seemed appealing, but there are too many uncertainties (rental rates, occupancy, fees) to make this a sound investment. I’m glad this article came out when it did…

  • Turk

    Had 10% down on a $1M unit at the W Las Vegas, but after reading this article, decided to back out. Fortunately, hadn’t yet gone to hard contract and was able to get the entire deposit refunded. The idea of a condotel seemed appealing, but there are too many uncertainties (rental rates, occupancy, fees) to make this a sound investment. I’m glad this article came out when it did…

  • http://www.totalnoid.com/ CHESSNOID

    It would be cool if you could get a follow up on this story to see how the owner actually did. It is possible that the property went up higher or that his room was rented out over 90%. Although $270 a night seems extremely high. Just a thought.

  • http://www.totalnoid.com/ CHESSNOID

    It would be cool if you could get a follow up on this story to see how the owner actually did. It is possible that the property went up higher or that his room was rented out over 90%. Although $270 a night seems extremely high. Just a thought.

  • http://www.totalnoid.com/ CHESSNOID

    It would be cool if you could get a follow up on this story to see how the owner actually did. It is possible that the property went up higher or that his room was rented out over 90%. Although $270 a night seems extremely high. Just a thought.

  • EconE

    are the taxes that are referred to property taxes? If so…does the person also have to pay income tax on the 37k rental income?

  • EconE

    are the taxes that are referred to property taxes? If so…does the person also have to pay income tax on the 37k rental income?

  • EconE

    are the taxes that are referred to property taxes? If so…does the person also have to pay income tax on the 37k rental income?