Investing in Condo Hotel but from ground up

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Investing in Condo Hotel but from ground up

Member since 2025 · 2 posts · 0 votes

Hi All,

I am a newbie on Condo Hotel investments. I have come across investing in a resort that is being built from the ground up. Can anyone advise what sort of important details I should be looking into so I don't get caught up with regretting the purchase? I know I should be looking at HOA and all property management fees, Location, buy laws, sales contract. But, this is not a standing property as of yet and it is supposed to have many amenities. It is supposed to be a 5 star hotel. What sought of details should I look into in this type of prospective investment? Thank you kindly.

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Collin HaysBusiness Member

Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes

I never advise investing in a condo. Condos are commodities, and when supply exceeds demand - which is most of the time - they will not rent for practically any price. We have a very nice condo on our program with a ton of amenities and great views. We almost can't rent it for the cleaning fee.

Why is that? The answer is in your post: "It is supposed to be a 5-star hotel." So the fancy hotels will be your competition. Except they deliver a lot of amenities that you cannot: Valet parking, room service, bell service, concierge, restaurants, coffee and liquor bars, meeting spaces, gift shops, and daily maid service.

And within five years, your condo isn't kept up to the standards of the Hiltons and Marriotts surrounding you, while your HOA keeps going up.

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Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
1y
I never advise investing in a condo. Condos are commodities, and when supply exceeds demand - which is most of the time - they will not rent for practically any price. We have a very nice condo on our program with a ton of amenities and great views. We almost can't rent it for the cleaning fee.
Why is that? The answer is in your post: "It is supposed to be a 5-star hotel." So the fancy hotels will be your competition. Except they deliver a lot of amenities that you cannot: Valet parking, room service, bell service, concierge, restaurants, coffee and liquor bars, meeting spaces, gift shops, and daily maid service.
And within five years, your condo isn't kept up to the standards of the Hiltons and Marriotts surrounding you, while your HOA keeps going up.
[email protected]806-672-7102
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Caroline Smith
OP
Member since 2025 · 2 posts · 0 votes
1y
The ground project will be a 5 star hotel with all those amenities. So how are the marriotts and Hiltons the competition? I am not sure I understand what you are trying to say? Are you saying the amenities cost so much then what the condo is being rented for or times rented is not enough to keep up with all the fees?
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Robert EllisBusiness Member
Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
1y
Quote from @Caroline Smith:

Hi All,

I am a newbie on Condo Hotel investments. I have come across investing in a resort that is being built from the ground up. Can anyone advise what sort of important details I should be looking into so I don't get caught up with regretting the purchase? I know I should be looking at HOA and all property management fees, Location, buy laws, sales contract. But, this is not a standing property as of yet and it is supposed to have many amenities. It is supposed to be a 5 star hotel. What sought of details should I look into in this type of prospective investment? Thank you kindly.

what city and state?
[email protected]786-494-6766
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Andrew SteffensBusiness Member
Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
1y
I am also leery of condos 99% of the time. There are some exceptions outside of owning the entire building where I recommend it. I recently ceased managing a condo rental at a resort in Orlando that was always vacant even at $50 a night.
[email protected]813-563-0877
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Jay HurstBusiness Member
Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
1y
Quote from @Caroline Smith:

Hi All,

I am a newbie on Condo Hotel investments. I have come across investing in a resort that is being built from the ground up. Can anyone advise what sort of important details I should be looking into so I don't get caught up with regretting the purchase? I know I should be looking at HOA and all property management fees, Location, buy laws, sales contract. But, this is not a standing property as of yet and it is supposed to have many amenities. It is supposed to be a 5 star hotel. What sought of details should I look into in this type of prospective investment? Thank you kindly.

Condotels are expensive to finance in he best case, impossible in the worst case. You need to understand how that effects market value down the road.
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Jon Martin
Member since 2022 · 1k+ posts · 1k+ votes
1y
As stated above there are lots of issues. They often take a hefty management fee (upwards of half+), and when combined with an ever increasing HOA and all the other normal expenses it can really be tough to pencil out.
Plus they tend to have have weird rules about how guests can access which amenities and services. Would make for awkward conversations and complaints if your guests are excited to use the nice pool and get denied.
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