What Is A Condotel?

For starters, a Condotel can also be referred to as a condo hotel or hotel-condo.

Condo hotels, typically, are high-rise buildings that are developed and operated as high-end, luxury hotels. Think branded properties like the Ritz Carlton or Westin!

These properties operate just like any hotel you’ve ever checked into, but each room is individually owned.

As the owner, you take fee simple title to the property. It’s yours, just like the home you currently own. But unlike your current home, there is a professional staff engaged in marketing, renting and daily management.

So, who normally buys these types of properties? People who want to enjoy a particular lifestyle and those who are looking for cash flow and appreciation

The people who buy for the lifestyle ( families with young kids, couples, athletic singles ) want to own a property at a resort that they love to go to. A resort that offers year-round fun for all levels, and all ages of outdoor enthusiasts. Come on, who wouldn’t be attracted by the idea of owning a beautiful property, at their favorite resort location, that’s cleaned, managed and looked after by a team of professionals?!

The other group of buyers are buying, only, if the property makes financial sense. These folks are looking for appreciation and cash flow. It also helps that the property is essentially 100% hassle free.

A note needs to be added here that the U.S. Government is super strict about how condo hotel projects can be advertised. In the past, condo hotel projects have advertised themselves as “real estate investments” and because the dollar value of these “real estate investments” was not clear, the U.S. Government will not allow the use of this reference.

What about financing? Yes, you can get a loan, but not through traditional lenders. And you may have to pay rates that are anywhere from 1% to 2% higher than for a traditional condominium.

Why? At this point, there’s no established secondary market. These types of “portfolio” loans are held onto and serviced by the lender who originated the loan.

Are there monthly Homeowner Association (HOA) Dues? Yes. The fees and corresponding services can vary. The HOA dues are applied to services like utilities, outside grounds maintenance, management & administration services, security and more.

What about insurance? The Homeowner’s Association will have a Master Insurance Policy. This policy is designed to cover the structure outside of the walls of your condominium. It is imperative then, that you obtain an insurance policy for the unit itself. This policy will cover from the walls in and will include liability and personal property. To do so, contact a local insurance broker who can then contact different insurers for the best policy. You may even want to make having an insurance policy, in place, before the close of escrow a condition of any offer.

Here are some contacts that can assist you with finding financing and insurance for a Condo hotel property in Mammoth Lakes:

1. Mat Dlugolenski of Cal Con Mutual Mortgage in San Diego, Ca. Office: 858-429-4638 ext. 105

2. Debbie Kruse of Sierra Sage Insurance Services, Inc., in Bishop, Ca. Office: 760-872-4051 Fax: 760-872-4071
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For more information on the Mammoth Lakes real estate market, please log onto my real estate website at www.easternsierraproperties.com