Traditional accommodations have evolved. Trends in vacation accommodations have changed in recent years, since travelers’ tastes go beyond the limits and restrictions of traditional hotels, opting to search for a condo hotel.
Today on the CREA Soluciones blog we will tell you the reasons to evaluate including a condohotel in your next development, why it is a growing trend and the most notable points of this type of project.
Reasons to invest in condo hotels
Passive income
Real estate investment generates attractive, constant passive income and a return on investment in a considerable time. In addition, since the administration and advertising will be carried out by a company (which can be a hotel brand), the owners do not have to put in the effort to attract new customers or serve them.
Cost effectiveness
While the investment for a condo hotel varies depending on the location, unit size, and amenities offered, the investment is more affordable compared to a stand-alone property. Furthermore, by having the support of a hotel brand, the return on investment will be faster.
Private properties
Although the complexes work and look like hotels, condo hotels are not, nor are they timeshares. This means that each unit is privately owned, deeded and the investor retains the rights to it, so he can sell, rent or live whenever he decides.
Hotel services
In the condo hotels there are services and amenities, such as swimming pools, spas, restaurants, among others that the owners can enjoy during their stay. In addition, they are highly attractive to new investors looking for properties that offer unique experiences.
How profitable is it to invest in a condohotel?
Condohotels in Mexico are not something new. It is a business model that has been key in the economic reactivation in tourist areas after the COVID-19 pandemic by responding to the demands of travelers looking for medium and long stays with the comforts of a hotel.
The hotel industry in 2023 had an estimated value of $250 billion dollars, with growth projections in the coming years, making it an attractive investment option.
The internal rate of return (IRR) that can be achieved when developing a 2 or 3 star condohotel in Mexico can vary significantly depending on various factors, such as the location of the project, the size and quality of the development, construction costs, the rate per night, efficient hotel management, and other economic and financial aspects.
In general, the IRR could be expected to be in a wide range, from around 10% to 20% or more, depending on the specific project and market circumstances. It is essential to conduct a detailed market study and consult with real estate and financial experts such as CREA Soluciones to obtain a more accurate estimate of the expected IRR for a particular project.
What is a condo hotel?
A condohotel is a condominium-like complex that looks and functions similar to a hotel. These complexes are divided into individually owned units that owners can rent or use as a vacation home.
In general, condo hotels are located in tourist locations such as beaches, shopping areas, urban centers or in golf complexes, making them very attractive to tourists looking for luxury and comfort services during their vacations.
Condohotel Features
While condo hotels are individually owned, meaning the owner maintains the rights to their unit, such as the right to sell, rent, or use it as a residence, resort management is handled by a professional company.
The company that manages the condohotel is in charge of tasks such as rental, advertising, maintenance and cleaning. In addition, condo hotels provide the same services as in a traditional hotel: reception, laundry, security, among others.
This means that in a condohotel you get complete services, like in a traditional hotel, but in a unit equipped to stay for longer stays.
Condo hotel owners will be able to rent their units for a short period, such as a couple of nights, or opt to rent for a long period, such as months or years.
Services provided by a condohotel
Services such as:
- Reception. As in any hotel, there is a reception to welcome and assist guests, tourist information, assistance, among other services.
- Cleaning. In a condohotel, there is a cleaning service for the units, both for guests and owners.
- Security. Surveillance and security cameras are almost always offered 24 hours a day, 7 days a week, in addition to parking, valet parking, concierge, among others.
- Swimming pool. Many condo hotels have one or more swimming pools and comfortable furniture for guests.
- Laundry. Many condo hotels offer laundry, dry cleaning and ironing services for owners and guests.
- Gym. Many condo hotels offer gym, yoga or meditation room services, and some even have golf courses for guests and the general public.
- Restaurant. As in hotels, restaurant, cafeteria and/or bar services are provided for guests, owners and the general public.
- Spa. Condo hotels also offer spa services, massages, holistic therapies and/or sauna for guests, owners and the general public.
Get advice from the experts at CREASoluciones
If you are thinking about investing in a condohotel, come to us. Make the most of the benefits of investing in a comfortable property, with the services and amenities of a hotel.
At CREA Soluciones we offer you real estate consulting, commercial appraisal services, feasibility studies, Real Estate Financial Analysis, financial models, highest and best use study, among others to guarantee that your investment in real estate gives you the greatest profitability.
Browse our website to learn more about the services we have for you. If you need more information about mixed-use development, write to us through the contact form, to the email info@creasoluciones.com.mx or call us at 5552778044. A specialist will be happy to assist you.
