By Cyndy Salgado
Whether you have clients looking for a second home in the city for vacation purposes or as a part-time residence for work, they have probably inquired about buying a hotel condo. While the hotel condo concept has been around for decades, in recent years it has become part of the nation’s lexicon due to the surge in hotel condo properties around the world.
Yet, for many buyers and, oftentimes, brokers, there is still an air of mystery to the hotel condo as it offers a lifestyle buyers cannot experience in a traditional condominium. As long as you keep in mind that there is no better performing real estate vehicle than a hotel condo when it comes to offering a definitive, low-maintenance lifestyle, the selling process becomes much easier.
‘Hotel Condo 101’
Owners of a hotel condo are part-time residents who have full access to all hotel amenities. When they’re not staying in their hotel condo, owners can have the hotel rent their unit. Most hotel condos also come fully furnished, which means all owners need to bring is their suitcase.
One of the most attractive aspects of owning a hotel condo is that there is the potential for income by placing the unit in the hotel rental program. A common misconception is hotel condos are meant to be income generators for their owners. Yes, a hotel condo offers the added benefit of potential income, but buyers need to realize any income they may receive from their hotel condo is gravy. It should not be their main motivation for purchasing.
Therefore, one of the first things you need to do when working with a client interested in a hotel condo is to find out what he wants to accomplish with his purchase, and set his expectations accordingly. One way to do this is to stay focused on the benefits of living in a hotel condo that are guaranteed, such as high-end services and a maintenance-free lifestyle.
For example, at Mandarin Oriental Tower, Chicago, hotel condo owners can order room service anytime at the touch of button; never have to wash a dish, make a bed or do laundry; borrow a hotel laptop while theirs is being fixed by the IT concierge; enjoy VIP reservation status at the Mandarin restaurants and spa; have the valet pull his car up at a moment’s notice; and get sold-out theatre tickets thanks to the 24-hour hotel concierge.
These amenities are the biggest advantages to owning a hotel condo versus a traditional condominium — a higher level of service with uncompromising luxuries.
Details make the difference
As each hotel condo offers its own distinct level of services, you need to become familiar with all hotel condo projects in order to find the amenities that best suit your client. The good news is that unlike the hundreds of traditional condominium developments in the Chicago area, there currently are less than 10 hotel condo projects, including Trump International Hotel & Tower; Mandarin Oriental Tower, Chicago; Shangri-La; The Elysian; and The Raffaello, to name a few.
In addition to divergent amenities and locations, these buildings also differ in their hotel condo rental programs. Again, to better serve your client, make sure you find out up front how often they want to stay in a hotel unit as this could easily narrow down their choices.
Another helpful tip for working with potential buyers is to suggest they visit an existing hotel under the same brand name or from the same developer. As international brands like Trump, Mandarin Oriental and Shangri-La are all making their Midwest debuts in Chicago, some local buyers may not be familiar with their services. However, all three brands offer hotels in other locations for buyers to visit and gain a better understanding of what it would be like to own a piece of a luxury hotel.
Finally, while hotel condos differ from most for-sale homes in a number of ways, there still are some fundamental rules of home buying that don’t change with a hotel condo:
• Location – Buyers should find a hotel condo in a location they love, near places they like to visit
• Enjoyment – Will buying a home make your client’s life better? If he feels this is the type of purchase that will add enjoyment and fun to his life, then the answer is simple.
Cyndy Salgado is VP of Development Marketing Group, a division of Koenig & Strey GMAC Real Estate. DMG serves the needs of residential developers with medium- to large-scale projects.