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What I know about condo hotels

Here is some information relating to a Condotel that I am buying - Ultima Residences - Ramos Tower. Turnover date December 2011   I did not buy it to live in, but rather the Lifestyle that

Harbour Plaza North Point Studio Apartment - 28 Sq.m Self-Rating: **** See Reviews 1 King size bed, 1 Bathroom 28 Sq.m (301 Sq.ft) Minimum length of stay: 1 month More privacy than hotels

Indeed there is a risk because all the agents will show you are forecasts assuming that the hotel will be booked well and the maintenance figures are typically lower in the first few years. :party0023:

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Ozepete

Yes, long ago I stopped believing in Santa Claus, The tooth fairy, The easter bunny and get rich quick promoters. If it's too good to be true, it's too good to be true. I would not invest one centavo with these type of promotions anywhere.

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Alan S
Yes, long ago I stopped believing in Santa Claus, The tooth fairy, The easter bunny

 

Damn. You gonna tell me they arent real?

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The only way to make any money is if you are the land owner or the developer. And even then you are taking a risk. But you always take risks with investments.

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David_LivinginTalisay

  • Here is some information relating to a Condotel that I am buying - Ultima Residences - Ramos Tower. Turnover date December 2011

ramos-day.jpg layout.jpg

 

I did not buy it to live in, but rather the Lifestyle that came with it (Club Ultima Membership with 70% Discount).

 

This gives free use of Gym, Swimming Pool, Library, Family Games room, 1st hourof Snooze lounge with massage chairs. 40% Discount off 'A la Carte' Menu, and use of the monthly Php500 Vouchers can give Buffer Lunch or Dinner to certain Restaurants on different weekdays. Pay your Monthly dues in Advance Php12,700, and you get all 12 months Php500 Vouchers and extra Nights accommodation, making it 2 nights.

 

My wife gets to become a life Member as does my Dad, but we don't have any children under age 21 to become Members also. One can use Swimming Pools and Gym of other Crown Regency developments also.

I did not NEED a Home Loan for the Ramos Tower Condo as I am using the in-house 0% Financing of FTRDC over 18 months

Condo hotel

From Wikipedia, the free encyclopedia

A condo hotel, also known as a hotel-condo or a Condotel, is a building used as both a condominium and a hotel.

Condo hotels are typically high-rise buildings developed and operated as luxury hotels, usually in major cities and resorts.[1] These hotels have condominium units which allow someone to own a full-service vacation home. When they aren't using this home, they can leverage the marketing and management done by the hotel chain to rent and manage the condo unit as it would any other hotel room.[2]

There is Investment Income potential from renting it out, either privately or by signing up to the Crown Regency Hotel managed Condotel Program. However the Contract is for 10 years so needs careful thought.

 

Ramos Condotel Proposal kit

 

The Ramos Tower Condotel Program gives ones 30 days FREE use, but does not need to be in you own Condotel, but can be any of the Crown Regency Group, like Boracay for example.

This is just like a Hotel stay, with Rooms cleaned and linen/towels changed etc, The Ramos Tower Condotel Studio (28 sq m. as standard), has a small Kitchen with Fridge/Microwave etc

What if the unit owner was not able to use his day benefit in a year?

  • If their unit was rented out during their thirty (30) day allotment, they will receive rental share if it was rented out during that period.

Are there association dues to be paid once the Condotel unit is enrolled under the Lease-Back Program?

  • There are NO Association Dues or Maintenance Fees to be paid once a condotel unit is enrolled under rental pooling by the unit owner.
  • The condotel/hotel operator shall take care of the association dues, maintenance and security of their investment

How Does the Lease-Back Program Work
(Rental Pooling)?

  • Percentage sharing of Unit owners will receive monthly income based on the type of unit regardless of whether the unit was leased or not.
  • This is because RAMOS TOWER will pool together its entire total income from rental operations and distribute this to unit owners according to the percentage sharing based on gross income.

 

If the unit owner decides not to enroll his unit under the Lease-Back Program, will the unit owner be charged of Association Dues?

    • Yes, if a unit owner decides not to enroll his unit under rental pooling, the owner will be charged with monthly association dues and maintenance fees which will be determined later on by the condotel/hotel operator.

Using the lowest of their 'estimates' with 60% utilisation average, then my 28 sq m Unit, might get P201K pa Nett ROI (if I decide to sign up to such Condotel Leaseback Program for 10 Years).

 

Now one knows this could be wildly out and it not even reach the lowest of the Utilisation estimates. However these Ultima Residences are used as 'overspill accommodation for Crown Regency Hotel guests that discover no vacancies on the days they require (at lower room rate than the Crown Regency Hotel itself no doubt, but they still get to use all the Crown Regency and Club Ultima facilities).

 

I did go to AGODA on-line Hotel Reservation systems

Crown Regency Hotel & Tower

Osme

Edited by David_LivinginTalisay
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David_LivinginTalisay

I don't like the condotel investments. I think they are bullshit !

 

 

 

Might be rather more useful/helpful to this Thread Discussion on 'Condo Hotels', if you explained exactly WHY you came to this opinion 'Diver Douglas' ?

 

I can see WHY they might want to sell Condotel Units and manage them as a hotel, since they don't have to find the Capital to establish the Hotel, the Condotel Owners are asked to pay for the Furnishings, decoration and the fittings and fixtures and appliances.

 

All this time the Condotel owners will end up bearing the depreciation cost of such furnishings, fixtures and fittings and appliances.

 

Having said this, it can all be calculated to determine if it is at all cost effective.

 

For example, with the Crown Regency Resort and Convention Center in Boracay if one gives up the 45 x Free days stay, and instead just accepts the 7 x Free days that come with the included Club Ultima International Membership (with extra night(s) if Club Dues paid as Annul payment in advance) then they can get a 'Guaranteed 8%pa ROI.

 

There is also an option to sell after 5 years, i) on the Open Market, ii) if unable to find significant Nett profit from your purchase price RTDC Developer will buy it off the Owner at the price they paid, iii) FTRDC will endeavour to find a Buyer paying higher price, on commission basis.

 

All costs covered in that 5 years also.

 

crrcc.jpg

Crown Regency Boracay

The Boracay Condotel Investment Proposal Kit

Now that takes care of the unknown variable of Room Occupancy Rates, as you end up getting 8%pa Nett ROI.

You are also guaranteed to get your Principal back as a minimum.

 

I just could not afford the increased price hike of these Units. For example their website accidentally had some 4 x T-3 units priced at Php5M and 2 x T-4a unit @ Php5.2M. I inquired about this and next thing I knew the website had raised those 4 x T3 units to match the Php6M of the other T-3 units. those 2 x T-4a units were then showing Php6.8M a 35% increase from pre 1st May prices!

 

aerial-view.jpg

Edited by David_LivinginTalisay
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Personally I don't consider this to be a wise investment. In addition to buying the unit - and I believe you mentioned a figure of around 1.8M Pesos - you have to pay a further 450,000 Pesos to join their managed scheme. Now, 30,000 of that is consumed by uniforms, maintenance, linens etc. The remainder, 420,000 is to cover furniture, fittings and appliances. One must ask, what on earth are they planning to provide that costs almost half a million Pesos for one 28 square metre room.

 

But that's not the whole story, because they will hope to sell as many managed programmes as possible and probably have a target of around 90%. Assuming that all those units are fitted-out to the same standard and with identical furniture, fittings and appliances, they will have buying power and can demand wholesale prices from their suppliers. So the true cost of fitting-out each unit is probably closer to 15% of what you're being asked to pay - assuming wholesale prices. And who gets to keep all the items they buy with your money? And what if the TV breaks and has to be replaced, who pays for the replacement?

 

So much for costs, now income. Let's say the management company have over-estimated the occupancy rate and the true average occupancy is a half or one-third of their projected figures. They get half and the remaining half is distributed amongst the owners who have signed-up for this scheme. The management company will have fixed costs - staff salaries and benefits, electricity, water, internet, garbage collection, property taxes. These - and more - all have to be paid. But suppose the management company's half-share of the income doesn't cover their costs, what then? I think it's highly likely that some sharp lawyer has already thought of that and has inserted a "claw-back" clause into the contract you will have to sign if you join. It could even be worse than that: you may find yourself paying the management company on a monthly basis your share of its operating costs.

 

A 7.4% ROI is the equivalent of being paid 500 Pesos a day, 365 days of the year but that would mean that units are rented at 1,000 per diem. (I know you didn't mention that ROI, I'm using it as an example.) That's much cheaper than a room at the Marco Polo so I'd suggest the quality of furnishings etc., will not be the best.

 

There's a lot of good quality accommodation available in the Metro area and the only occasion that I know of when it was almost impossible to get a room in a four or five star hotel was just before the start of the ASEAN Conference in late 2006 early 2007. Even then there were still rooms available. Since then more hotels have opened including a huge hotel/resort complex on Mactan, soon to be joined by the Renaissance Hotel adjacent to SM Mall (it may even be open now, I haven't been that way in over 2 months).

 

 

 

 

Mark

Edited by Markham
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How is this scheme different from just buying a condo?

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David_LivinginTalisay

How is this scheme different from just buying a condo?

 

'locktite' in the case of these 'FTRDC' properties, there is no difference.

 

One is buying a 'Condo'. But on these 'Ultima Residenses' one has the 'Option' of also signing up to their Condotel Leaseback Program. You have to decide if it is worth it, or better off Renting it out yourself.

 

I used to own a 1 bedroom apartment in Paphos Gardens, in Cyprus. I signed that over to Leptos Travel to rent out in a similar 'pooled rental' managed program.

 

So I am familier with such managed programs so do know what to check for in any such Condotel Leaseback Program. However I did not have the chance to legally rent it out myself, as a non Resident Foreiner.

 

Should have kept the Apartment, as Cyprus entered the EEC later, and I could then have legally rented it out, as an EEC Citizen.

 

As I am 'Permanent Resident' here in the Philippines, and 'exempt' the need for 'Alien Employment Permit' (AEP)', there should not be any restrictions to renting/leasing it out?

Edited by David_LivinginTalisay
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.............

So much for costs, now income. Let's say the management company have over-estimated the occupancy rate and the true average occupancy is a half or one-third of their projected figures. They get half and the remaining half is distributed amongst the owners who have signed-up for this scheme. The management company will have fixed costs - staff salaries and benefits, electricity, water, internet, garbage collection, property taxes. These - and more - all have to be paid. But suppose the management company's half-share of the income doesn't cover their costs, what then? I think it's highly likely that some sharp lawyer has already thought of that and has inserted a "claw-back" clause into the contract you will have to sign if you join. It could even be worse than that: you may find yourself paying the management company on a monthly basis your share of its operating costs.

.....

Mark

 

I was thinking pretty much the same thing. Though, I think it's more likely the management with just manipulate the posted occupancy rates down (which are not guaranteed), so the owners will be paid a smaller share.

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smokey

How is this scheme different from just buying a condo?

 

 

 

 

 

 

 

First you give control to the management company so even if its empty YOU are not allowed to stay in YOUR unit more then 28 days a year... Also you must pay them to maintain YOUR unit ... its just a nightmare you get 100% of the cost and 50% of the income and have NO control ... Best deal for the developer its called OPM other peoples money Now will this appeal to family's on vacation...??? the only rooms with a chance of breaking even are the larger rooms..

Edited by robert51
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smokey

How is this scheme different from just buying a condo?

 

'locktite' in the case of these 'FTRDC' properties, there is no difference.

 

One is buying a 'Condo'. But on these 'Ultima Residenses' one has the 'Option' of also signing up to their Condotel Leaseback Program. You have to decide if it is worth it, or better off Renting it out yourself.

 

I used to own a 1 bedroom apartment in Paphos Gardens, in Cyprus. I signed that over to Leptos Travel to rent out in a similar 'pooled rental' managed program.

 

So I am familier with such managed programs so do know what to check for in any such Condotel Leaseback Program. However I did not have the chance to legally rent it out myself, as a non Resident Foreiner.

 

Should have kept the Apartment, as Cyprus entered the EEC later, and I could then have legally rented it out, as an EEC Citizen.

 

As I am 'Permanent Resident' here in the Philippines, and 'exempt' the need for 'Alien Employment Permit' (AEP)', there should not be any restrictions to renting/leasing it out?

 

 

 

 

 

well david as you seem to like this investment may i suggest you rent the unit yourself why give control to someone else of your money..

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