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Typical Costs of Purchasing a Condo Hotel Unit |
Pricing varies dramatically from condo hotel to condo hotel. Youll commonly find price ranges to be between $200,000 to over 1 million. Typically, a branded condo hotel like a Ritz or a Trump will cost more than a non-branded condo hotel. Most luxury 4 and 5 star condo hotels sell at an average of $800 to $1,300 a square foot.
Nearly all condo hotels are sold at preconstruction. In fact, the very best condo hotels tend to sell out 100% of their inventory in the preconstruction stage. Savvy real estate investors know that preconstruction pricing can be a bargain and that the property can sell for a great deal more once it is completed and fully operational.
Some developments will sell out their inventory over the course of two or three phases. Pricing tends to be progressively higher each phase. On some of the higher end condo hotels, you can see a price jump of 10% between phase 1 and phase 2. And, of course, the difference between phase 2 and phase 3 can be equally substantial. This is why youll often find real estate investors limit their purchases of condo hotels to the very first phase of the development.
If a particular property is having trouble selling its inventory and the developer simply wants to move on to the next project, they might discount the properties in the final phase just to get rid of them. Be wary of this. Generally, its the non-branded and non-desirable condo hotels that do this. Its nearly unheard of for a sought after luxury condo hotel to partake in this practice and you could be setting yourself up for disaster if you buy a discounted property. The main idea when buying a condo hotel is to buy a property with the possibility of appreciation. You dont want to buy a property that is being discounted and depreciated from the moment its sold.
On occasion, some developers will sell their properties at a slight discount if the buyer is going to make a bulk purchase of 10 to 30 units. This practice is desirable for all parties involved. The developer has peace of mind knowing that they can unload a significant amount of property and it helps them get closer to their sales target. The buyer, of course, gets to purchase a premium property at a discount and will realize these gains down the road when they resell them. Youll often find bulk purchases occurring in highly sought after 4 and 5 star developments. Premium properties tend to attract heavy hitting real estate investors.
About AuthorTodd Peterson is the President and founder of the popular real estate site, PremiumCondoHotels.com
Visit http://www.PremiumCondoHotels.com to learn more about the condo hotel industry.
Source: ArticleTrader.com
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