Florida Fractional Ownership

Condo hotels are condominium units operated in a hotel setting that are sold to individual investors. These units may be used as vacation homes or placed in the rental pool to generate income.

Condo hotels typically charge owner-investors a hefty split of any rental income: 50% is common. This limits potential rental income when the unit is unused by the owner.

A benefit of condo hotels is that condo owners enjoy access to the hotel’s amenities. This convenience factor is offset by the fees charged for these services.

Many large hoteliers are devoting space in their resort hotels to the condo concept. Prices vary widely, from $200,000 to $5,000,000. Top-tier hotel chains are aggressively entering this business: Trump, Ritz-Carlton, Hilton, Starwood, Four Seasons and St. Regis all have condo hotel products.Condos situated within hotels often command a 20% to 100% premium over comparable condominiums not in a hotel setting.

Hotel-based condos maintain easy liquidity as they can be sold on the open market. However, many condo hotel operators impose significant “sponsor fees” that can reduce the return realized on the sale of a condo property.