Will a Condo Hotel Cash Flow?
It is impossible to answer such a general question without discussing a specific condo hotel. With that said, it should be known that most condo hotels are strategically located in luxurious resort settings and premier urban destinations, which command top dollar for the nightly stays and are always marked by high year round occupancy rates.
This combination of high nightly rental rates and high year round occupancy rates have the ability to create a very desirable cash flow outcome. It is for this reason that many investors have added condo hotels to their real estate portfolios. In particular, they've been drawn to branded condo hotels, such as Trump, W, Ritz, Westin, Hard Rock, etc.
Luxury branded condo hotels typically secure the very best locations, charge higher nightly rates, and also have a higher year round occupancy than competing hotels in the same market. But, it should be noted that some of the best performing condo hotels are non-branded.
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