Biggest corporate rip-off yet disguised as condo-hotel room boom
An amazing 56 percent concentration of condo-hotel rooms in the pipeline are effectively in Orlando, Fort Lauderdale, Miami, and lastly Las Vegas. Lodging econometrics can be very tricky in a down-turning-economy where there are falling investor demands.
Perhaps the riskiest business ever is sweeping Orlando in the form of 15,000 condo-hotel rooms. It’s hard to distinguish these condo-hotels from their outward appearance, but inwardly, their business models are very unique. All of the amenities such as room service, front lobbies, shuttles, and banquets are the same for the most part.
A whopping 15,518 condo-rooms are in the pipeline for Florida alone. Banks are hoping that these units will be there salvation during a time of rising construction prices Among the victims will be the Palazzo del Lago and Blue Rose with price tags of $300 thousand.
Even in this bull market the Blue Rose averages about 12 sales per week which is unseasonably low for the same time 9 years ago. With 1,350 condo-hotel rooms, Blue Rose is scheduled to open in 2010.
As an investor, the location of the hotel and whether it’s viable should be the determinate factor on whether to invest. For some, these condo-hotel rooms will be a second home with hopes of renting these units at other times of the year.
Unless you purchase a unit in a signature hotel project such as Palazzo del Lago operating as an Inter-Continental Hotel, you can forget having a positive cash flow, but your only hope might be to offset your mortgage payments.
There are some real pertinent questions regarding the condo market such as will the market go soft, will condo costs be offset by rentals, what really is the investment potential of these condo-hotel rooms?
It would be safe to view these condo-hotel rooms as a second home that does not required remodeling instead of an investment which might not be viable in the future.