Timeshares Vs. Condo Hotels For Vacation Home Ownership
Condo hotels, also known as condotels, are a relatively new concept in vacation home ownership. They allow individuals to own condos in luxury hotels and have access to all the amenities of that hotel. When not using their condo unit themselves, owners have the option of placing it in the hotel's rental program and receiving a percentage of the revenue it generates.
Because the condo hotel concept is so new, it's often confused with timeshares, a popular vacation home option that has been around since the 1970s. In reality, condo hotels have many qualities that set them apart from timeshares and make them appealing to a unique segment of the second home market. Here's a comparison between these two types of real estate investment.
FLEXIBILITY IN USE
Timeshares - When you purchase a timeshare, you choose not only a set location but also a specific week or two that you will use your vacation home every year.
Condo Hotels - With a condo hotel, you have flexibility to use your unit whenever you want. Keep in mind, however, that some condo hotels do have living restrictions that prevent you from making your condo a permanent residence.
AMENITIES
Timeshares - The average timeshare has a community pool and some common areas. Know more weekly hotels
Condo Hotels - Condo hotels have many of the amenities you would find at luxury hotels. In addition to a pool (or pools), there is probably an on-site restaurant (possibly several), a lounge, a full-service spa, a state-of-the-art exercise facility, a poolside bar, etc.
FURNISHINGS
Timeshares - Timeshares are sold fully furnished. The quality of furnishings depends on the individual development. The cost for the furnishings is built into the price.
Condo Hotels - Condo hotel units are sold fully furnished typically with high-end furniture, appliances and fixtures selected by a professional interior designer. The cost for furnishings is included in the price of the condo hotel unit.
SERVICES
Timeshares - In a timeshare, you are responsible for your own housekeeping and unit upkeep during your stay.
Condo Hotels - You get daily housekeeping as you would in a luxury hotel. You have access to room service, concierge services, maintenance services and check-in services. The vast majority of condo hotels are operated by big-name hoteliers like Ritz Carlton and Hilton, the consummate professionals when it comes to customer service. Most of the same services available at their high-end hotels are offered at their condo hotels.
LOCATION
Timeshares - Timeshares are located in highly-desirable resort areas.
Condo Hotels - Condo hotels are also located in highly-desirable resort areas.
PRICE
Timeshares - Prices for timeshares vary greatly but are typically lower than condo hotel prices because you are only purchasing one or two weeks of usage. In addition, you do not receive any of the revenue generated during the 50+ weeks that your timeshare unit is used by others.
With timeshares, as much as 40%-50% of the price goes to sales commissions. Why are the sales commissions so high? The developer must maintain a large sales force in order to make approximately 50 sales for every unit (one for every week of the year).
Condo Hotels - You receive deeded ownership to the property. Although more expensive, condo hotels tend to give you more for your money than timeshares. More of your dollar goes into "bricks and mortar" high-quality finishes not sales commissions.
In addition, when not using your condo hotel unit, you can place it in the management's rental program and receive a percentage of the revenue it generates, helping to offset your maintenance costs and debt service.
RENTAL INCOME POTENTIAL
Timeshares - You have the option of renting out you