In our previous posts, you have read about what a condominium is and factors you should consider before buying one. In this article, we will break down everything you need to know about another interesting term in real estate which is Condotel.
What is a Condotel?
The majority of people in Cambodia might not have heard of the word “condotel” as it is not very popular here in the kingdom. In short, condotel or condo hotel is a hybrid of hotel and condominium, but mainly being operated as a commercial hotel in spite of the fact that the units in it are individually owned by different owners.
Condotels have distinguishing features differentiating them from regular condominiums including reservation desks, short-term occupancy for temporary guests/tourists, in-house restaurant, housekeeping and concierge services. They will likely include amenities and features that are usually found at conventional hotels like swimming pools, fitness center, steaming and sauna room and so on.
How did the condotel concept begin?
Condotels can be viewed by potential real estate buyers as a vacation home for personal enjoyment. Many condotels are situated in prime locations like in special economic zones or tourist destinations. Location is the primary factor for most developers when considering condotel projects because it is very instrumental in attracting potential buyers/short-term travelers to their properties.
Is condotel a good investment?
If you consider investing in a condotel, please bear in mind that you’re pursuing the opportunity to generate income over time through a short-term rental of your unit to a temporary tenant. As mentioned before, condotels should be viewed as a vacation home or secondary home due to the unstable real estate market, especially during this Covid-19 pandemic. Keep in mind that, like condominiums, you are also required to pay management fees so that they (the Property Management Company) can continue running daily operations, maintain the property and execute finance-related matters.
What are the factors you should consider before buying one?
There are a few primary factors you should contemplate before purchasing condotels. First off, LOCATION. This is the most important factor as it could decide whether you will regret or be satisfied with your decision in buying it. If you would like to rent it out to potential short-term occupants, think ahead that your potential tenants (tourists/travelers) will opt to stay somewhere adjacent to tourist destination hotspots. So, it’s crucial to do your homework regarding locations. Second, SOLID FACILITIES PACKAGE. Just imagine yourself as a hypothetical short-term traveler who would like to visit a tourist destination site. You would probably like to stay somewhere near it and on top of the convenient location, the place that you stay is equipped with top-of-the-class facilities and features that will impress you and make your short-term trip memorable. You would probably decide to extend your stay and recommend it to friends or family later. Therefore, picking the right condotel with top-notch facilities and features could prove to be pivotal. The third factor is choosing the RIGHT PROPERTY MANAGEMENT COMPANY. Since condotels are mostly viewed as a vacation home or secondary home, having a good Property Management Company in charge of your unit/property while you’re not there is another crucial factor that you need to think in advance. A capable Property Management Firm with hands-on experience in managing properties of all types and practical real estate knowledge could be vital in deciding the fate of your condotel investment.
Final Thought
Condotels are an ideal solution for those who want to own a condo in a resort area but don’t want to leave the unit vacant when they aren’t using it. Is it a good investment? The answer depends on the individual who invests in it. Are you buying it as a vacation home and would like to make some money while you’re away? Then, it could be a great investment. Just bear in mind that it probably won’t generate as much passive income as regular condominiums do in terms of rental of your unit.
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