Condo-hotels at the Del
The housing and real estate markets are undoubtedly slowing throughout the country. People are looking for alternative investment strategies during this uncertain time.
One such investment opportunity springing up throughout the California coast is condo-hotels. Many resorts and high-end hotels are now offering condo-hotels, in which a buyer purchases one of the condos, and then rents it out to tourists when they are not occupying it.
Although these seem like a perfect investment opportunity, there are some things to be aware of. One of the most talked-about condo-hotel projects is in San Diego, at the illustrious Hotel Del Coronado.
An August 25, 2006 article by Janine Zuniga in The San Diego Union Tribune, “Hotel Del going into condo business,” explains the details of these new developments.
“For $2.7 million, you, too, can own a piece of the Hotel Del Coronado. That’s the starting price on the most affordable of 35 luxury-built beachfront cottages and villas under construction at the 118-year-old hotel. The only drawback is that owners can use the condos for only 90 days a year. Then they go back into the rental pool with the hotel’s other 679 rooms.”
Most people are purchasing these properties as an investment or as a second home or vacation unit, so only being able to use them for a certain amount of days does not pose any real problems.
“Hotel officials received approval this month from the state Coastal Commission for a tentative subdivision map for Beach Village, the former site of a beach cottage and two buildings containing nine rooms that were part of the hotel. The first phase of Beach Village may be completed as early as January. All phases are set to be finished by July 2007.”
“‘In my experience in talking to people, I think they are going to go quite quickly,’ said Gary Driver, vice president of Hotel Del Realty Company, which will oversee sales.”
There are many other condo-hotel projects in the works throughout Southern California, but they must all be approved by a commission first.
“The condo-hotel concept is relatively new on the West Coast, but is catching on in San Diego County. There are at least four cities in the county where condo-hotel projects are being planned or considered. In downtown San Diego, for-sale condos at the House of Blues’ ‘Diegan’ are set to open in 2008 and the Hard Rock hotel San Diego’s condos may open by next summer. The La Costa Resort & Spa in Carlsbad completed the first phase of its condos in January and a second phase is underway. The condos are selling for between $1 million and $1.5 million.”
The most difficult thing in this whole process is getting people to understand the underlying concepts behind the hotel-condos. It may be hard to get people to shell out such a large sum of money, only to tell them they will have limited use of the facilities.
“Owners may spend up to 90 days a year, up to 25 days consecutively during any 50-day period, in their condos. They are not time shares, which have multiple owners. There is one deed. Owners may pass them on to family, as with any property, in a will.”
