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Looking into this, it appears that some of the management companies put restrictions on how often or how many days you can use the property yourself. So if it became necessary to live out of it on a short term or longer basis, you might not be able to. I think the devil is in the details and each property or municipality in which the property is located must be thoroughly researched before buying.
If a property or locality has owner occupancy restrictions in place, I fail to see how this is that much different from a timeshare.
Condo Hotels in Destin are everywhere, but, not as traditional hotels with rooms for rent. They are condos with an average of 1000-ft that people rent out on a short-term basis for 9+ months out of the year. It seems to work very well, since there are at least a thousand of them here.
Typically, management companies take care of bookings, cleaning, maintenance, etc., for which they get a pretty healthy percentage off the top. Not only do folks earn a great cash flow on their money, the condo prices in Destin have appreciated about 50-percent over the past 3-4 years.
The ski resorts in Colorado have them as well. The only complaint I've heard is that the rates you can charge depend on how updated your unit is, so you end up investing in upgrades and renovations much more frequently than you would in your primary home. The rental income, however, is enough to cover the mortgage; it doesn't all go to management, from what I've been told.
Of course, I'm sure each condo differs in specifics.
The ski resorts in Colorado have them as well. The only complaint I've heard is that the rates you can charge depend on how updated your unit is, so you end up investing in upgrades and renovations much more frequently than you would in your primary home. The rental income, however, is enough to cover the mortgage; it doesn't all go to management, from what I've been told.
Of course, I'm sure each condo differs in specifics.
They take huge wear & tear. To keep a condo-hotel unit in premium condition is a very large expense. You're also typically on the hook for all kinds of special assessments to constantly update the common areas which also take a beating. You also might be on the hook for subsidizing a restaurant on the property. There are also a lot of places where the developer owns the common areas and leases them to the unit owners with the unit owners on the hook for maintenance. You really need to understand those details and they're often carefully hidden from you.
If you buy somewhere that does the room nights at premium prices, it can make sense. Most properties aren't like that and it's really tough to sell them on the secondary market.
They are timeshare for the upper-middle class. In other words a rip off.
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