Costs Associated with Owning a Condo Hotel
Condo hotels have many of the same costs that you would find with the purchase of any other form of real estate. Typically, you have three costs. You have your monthly mortgage payment, yearly property taxes, and monthly Homeowner Association Dues (HOA’s).
Your monthly mortgage for a condo hotel will operate in the same manner as a mortgage you might have for the residence in which you currently reside. You obtain a loan, agree to all conditions and promise to make monthly payments, and then you make your monthly mortgage payments until the loan is resolved. That’s it. Just remember condo hotel loans are not saleable to Freddie Mac or Fannie Mae and therefore carry slightly higher rates and stricter loan qualification terms.
In almost all circumstance, yearly property taxes will be the exact same for a condo hotel as they will be for traditional real estate in the same area. For example, if property taxes are 1.2% for a single family home, in all likelihood, the property taxes for a condo hotel in that same location will be 1.2%.
Every condo hotel will have HOA dues. In addition, most condo hotels also have master association dues. These expenses will be assessed to all unit owners on a monthly basis. The best part about condo hotel HOA dues is that they cover nearly everything. HOA’s will typically cover all utilities: electricity, air conditioning, water, etc. Most importantly, most HOA’s also cover the room reserves. This means it’s highly unlikely that you’ll ever be faced with an unexpected cost that you’ll have to pay for out of pocket. Other items covered by HOA’s are ground maintenance and common area maintenance.
All in all, condo hotels have all the costs that you would expect to find. The fees of ownership vary only slightly from what you would find with traditional real estate. Of course, owners of traditional real estate rarely have an HOA that covers all utilities and reserves for home repair.
- Last edited November 26 2007
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