Condo hotels or condotel are increasingly popular among investors. How could it not be, one of these property investment instruments is believed to offer various benefits. Are you curious about the benefits of condotel investment? Let’s discuss it in more detail.
Get to Know the Meaning and Benefits of Condotel Investment
Before discussing the benefits further, let’s first review what a condotel is. Basically, condotel is an abbreviation of condominium hotel. This condominium property is operated like a hotel. However, the ownership rights are divided like a condominium. Simply put, each room in a condotel can be in the name of a different owner.
Meanwhile, the management remains one operator. As a unit owner, one can take advantage of the existing facilities. Such as cleaning services, reception, swimming pool and various other public facilities.
Additionally, condotel unit owners do not live there permanently. Instead, they rent out the units to hotel visitors who come for holidays or temporary business trips. As a type of investment, condotels offer various attractive benefits such as:
1. Passive Income
The main advantage of condotel investment is the promising passive income potential. The owners will get a share of the rental income. From investors’ confessions summarized on Alex Zeta’s YouTube, the average profit value can reach 35%.
Interestingly, the hotel operator will manage all the rental processes from marketing to unit maintenance. This is very suitable for investors who want to enjoy profits without the hassle of managing their own property.
2. Complete Facilities
Condotels usually offer many facilities like a 5-star hotel. These include cleaning services, 24-hour security, swimming pools, restaurants, spas and fitness centers. As unit owners, we can enjoy the facilities without having to pay additional costs. Apart from that, the unit is also managed to a high standard. So as to maintain the quality and comfort of the guests who stay.
3. Diversify Investment Portfolio
The next benefits of condotel investment is that it can be an effective step to diversify your investment portfolio. Apart from investing in shares or property, condotels offer assets that can provide benefits from the tourism sector.
The strategic location of condotels, such as in tourist areas or business centers, can increase the potential for long-term profits. This diversification helps reduce overall risk. Because income from condotels does not completely depend on the performance of the property sector or shares alone.
4. Measurable Risk with Professional Support
Because it is managed by a professional operator, the risks associated with property operations and management are smaller. This allows investors to focus on potential profits without having to worry about technical or administrative issues. This often happens in conventional rental properties.
5. Credit System Available
Finally, it turns out that we can also invest in condo hotels using a credit system. In other words, payments can be made in stages. Of course, it makes it easier for investors because they don’t have to spend large amounts of cash at the start. However, not all condotel operators provide a system like this.
Condotel Investment Risks
Apart from understanding the benefits of condotel investment, we also need to pay attention to a number of disadvantages. Because like other investment instruments, condotels also have various risks. One of the biggest risks is dependence on the performance of hotel operators.
If the operator is unable to attract many guests or manage the hotel well, revenues can be very limited. Therefore, before investing, make sure to choose a condotel with experienced operators.
Income from condotel investment is promising but depends on the tourism market and the economy. If the tourism sector is sluggish, for example due to natural disasters, a pandemic, or a recession, hotel occupancy rates could decline. Moreover, unlike ordinary apartments, condotels cannot be used for permanent residence.
Overall, the benefits of condotel investment are indeed attractive. However, like other types of investment, condominiums also carry risks. By considering all the benefits and risks, condotel investment can be a profitable choice. As long as we do it carefully and wisely.