Just north of Miami, rising 26 floors over the shimmering Atlantic Ocean, Le Meridien looks like an oceanfront resort hotel. The internationally-known restaurant Bice beckons in the lobby. The pool, fitness center and spa round out the amenities of an upscale hotel.
But it's not a hotel. Like a growing number of projects in South Florida and across the country, Le Meridien is a "condominium hotel," in which each unit is a condominium owned by buyers who live there full or part time.
In South Florida, Le Meridien is one of about 30 condominium-hotel projects that are proposed, under construction or sold. At a time when traditional hotel financing can be hard to get, developers like the upfront capital from buyers' deposits and the higher per-square-foot prices.
For buyers, the projects offer prime locations in popular destinations and hotel amenities including full-time staff. Buyers also stand to gain financially if values appreciate. And buyers have the potential for rental income.
When owners are not using the units, the hotel company can rent them to outside guests and split the rental income with owners.
Like a traditional condominium, there's a condo association, property taxes and a monthly condo fee. In the Miami area, that monthly fee generally runs about $800 for a 1,000-square-foot unit.
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Source - USATODAY
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PROS AND CONS OF CONDO HOTELS
If owning your hotel room at a frequent destination has some appeal, consider these issues:
Pros
• Ownership of a condo in a four- or five-star hotel.
• Income from renting the room to other guests.
• Hassle-free real estate ownership.
• The unit may appreciate in value.
• Interest payments on a mortgage may be deductible.
• Repair and routine replacement are handled by the hotel.
• No hotel taxes when you stay in your own unit.
Cons
• Numbers are increasing, but condo hotels aren't available everywhere.
• The unit may lose value over time.
• Local governments typically limit the time the owners may use them, to assure room availability for visitors.
• Financing may be costlier than for a primary residence.
• You will need to give notice that you'll be staying in the hotel.
• You may not be able to use your room if it has been reserved by another guest.
• You're likely to pay fees for housekeeping and other services.
• There will be a monthly condo fee.
• Income from guests is vulnerable to decline in travel.
• You usually have to buy insurance to protect against liability claims and some types of damage or loss.
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