INVESTING IN CONDOMINIUM HOTEL
INVESTING IN CONDOMINIUM HOTEL
I got good news and bad news!
The bad news is that Filipinos abroad who are considering real estate as investment vehicle for their hard-earned money find it too challenging. Owning a typical residential condominium and managing yourself can be tedious and time-consuming in doing lots of things.
You have to take care of the marketing – from advertising, entertaining prospects, to closing the deals and documentation. Investors working abroad just don’t have the time to do all of these.
But the good news is that a new concept of property management called Condominium Hotel (or simply Condotel) where your condo unit will be managed by an operator to run the business for you. While you are working abroad, your investment is working for you.
For a person working abroad, investing in condominium hotel can be a very smart choice to convert your hard-earned money into a tangible asset that can generate decent and immediate earnings in the future, plus value appreciation in the long-term.
WHAT IS A CONDO HOTEL?
To understand how a condotel functions, we’ll take a look at the description from Sta. Lucia Realty which I am affiliated with.
A condotel is operated as a hotel with a registration desk, cleaning service and more. The units are individually owned by investors. Their units are pooled in the hotel rental program where it is rented out like any other hotel room.
HOW LONG WILL THE UNIT BE PART OF THE HOTEL POOL?
The condotel will be operated for 15 years. After 15 years, the unit owners will have the option to individually lease it to others or live in it. You have to check if the condotel can be renewed and continue to be pooled in the hotel rental program.
WHAT BENEFITS DO I GET IF I INVEST IN A CONDOTEL?
- You will be paid with quarterly dividends from the net income
- You will have 30 room nights free every year with an option to use 3 nights/year in other hotel owned by Sta. Lucia Realty
- You earn income even if your particular unit is not leased or used
WILL UNIT OWNERS STILL GET DIVIDENDS EVEN IF UNIT WAS NOT RENTED?
Yes! A condominium hotel owner will still be entitled dividends in Net Room Revenue regardless of whether the owner’s unit was actually rented or not. Net Room revenue generated from all hotel units are issued to all hotel unit owners (per sq.m. basis) after the end of each quarter.
WHAT ARE THE ADVANTAGES OF STA LUCIA AS HOTEL OPERATOR?
- A “worry free” investment. The hotel operator manages all the operations – leasing of the hotel rooms, their maintenance, refurbishment and improvement as well as their operating expenses, real property taxes, association dues, common area charges, utilities, insurance and other related expenses.
- An independent auditor, accredited with the Philippine Securities and Exchange Commission, will be hired to audit, examine or review the hotel operator’s annual operating statement.
- Low property management fee of 30 percent. It is better compared to others who charged between 50 to 60 percent.
- Condotel will be managed by experienced hotel property management group with 3 operational hotels to date who are committed after the income commitment to investors.
- Tie-ups with online bookings sites like agoda.com, booking.com, expedia.com, orbitz.com, asiaroom.com, hotels.com, and others.
WHY INVEST IN A CONDOTEL?
- Hassle-free ownership
- No landlord issues
- Avoid maintenance headaches
CONDOTEL AS OPPORTUNITY FOR OFWs
Condotel is a great way for a person working abroad to invest and put his/her money to work. You will not be spending much time to manage this investment. You don’t have to look for somebody to hire to manage and run the business. Thus, your investment will be completely passive.