# Condo Hotel form of real estate ownership



## PCH1 (Sep 30, 2007)

I just joined this site and I'm trying to get a pulse on everyone's thoughts about the condo hotel form of ownership.  It's not quite like timeshare, but it does have many similiarities.


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## Steamboat Bill (Sep 30, 2007)

There are a few of us here that have experience with them.

I have owned over 5 condo-hotels in Whistler and find that they are NOT as good of an investment as everyone thinks. I have made LESS money off my condo-hotels than if I left the cash in a CD.

There are a few "RARE" examples where people actually have a postive cash flow and/or get significant capital appreciation in places like Hawaii.

However, all condo-hotel projects mainly benefit the developer and hotel chain...the actual owner usually makes the least amount of profit after you account for all the fees, etc.

I would love to see some hard data from people that have owned condo-hotels for more than 3 years (like me) that have made any significant return on their investments.

Please don't post any "projected earnings" for new properties as these are 100% pure speculation.


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## Kagehitokiri (Sep 30, 2007)

bill, do you happen to know how well the FS Whistler condos have done in terms of resales/rentals? or if they allow private rentals?

one example of guaranteed, instead of projected, (and arent they restricted in making projections, at least in the US?) is banyan tree. they let you choose between 6% guaranteed for 6 years, and 30% of rental income.

personally, im interested in destination clubs as an investment in leisure travel, not as a financial investment. any return is a bonus.

interesting there was a thread like this on FT a month ago  >
http://flyertalk.com/forum/showthread.php?t=729606


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## Steamboat Bill (Sep 30, 2007)

I was at the grand opening of the Whistler Four Seasons in 2004. It is a great property to visit, but the prices were very high to buy and the revenue, so far, has been unimpressive. I have not followed the Whistler FS in a while. One of the problems with a 5 star resort is that everything gets replaced very fast (carpet, linnen, etc) and this makes running a resort like this very expensive.


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## T_R_Oglodyte (Sep 30, 2007)

Kagehitokiri said:


> bill, do you happen to know how well the FS Whistler condos have done in terms of resales/rentals? or if they allow private rentals?



In most developments in Whistler Village (including the Upper Village and the Benchlands) and in Creekside owners are prohibited from using their condos for more than 30 days in each of winter and summer.  Owners are also obligated to list their units with a rental agency. Consequently there is a very active rental market in Whistler with a large supply of units (and considerable competition).

I've known several people who have owned condos at Whistler and none have made any amount of money - most have indicated they break even, with the 30 days of usage during ski season being a primary benefit (though using those 30 days cuts significantly into the rental income unless the owners are able to squeeze those days into one or two day blocks between rentals when the units would otherwise be vacant).

I sold the Whistler timeshare I owned for awhile because I couldn't justify owning as compared with the cost and advantages of simply renting.


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## Steamboat Bill (Sep 30, 2007)

I have made more from the $CAD increase vs the $USD than any rental or capital appreciation. I bought my hotel-condos when the conversion was 70c US = $1 CAD.


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## PerryM (Sep 30, 2007)

*Old news/new news......*

Condo Hotels (CHs) make sense if you buy pre-construction with a 3 year build cycle AND the real estate market isn’t crashing.  A major name brand is some protection but when CHs are hot they are hard to make any money and when they are cold folks are scared to buy them.

CH’s are great for the developers – they get their money upfront and charge management fees for the life of the project.  If the CH is the type where the “owners” own their condo “From the paint inwards” and the developer owns everything else, then the developer stills owns the building, land and all other facilities.

The owner does participate in real estate appreciation.

I don’t have any stats but guess that the owner occupies the CH 2-4 weeks a year on the average.

I now believe that a Destination Club (DC) offers the same access for 1/10 the cost but with the loss of real estate appreciation.  The developer keeps 100% of the resort and can sell DCs later down the road.


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