In a condo hotel, a buyer makes a fee simple purchase of a deeded Clavon condominium unit/guestroom. When not occupying the room, the owner may make the unit available to guests at the hotel through a rental management or leaseback program. Any room revenue generated through the program is shared between the unit owner and the developer/managing partner. This scenario provides a host of tangible benefits for the condominium owner, including a deed to a physical room, access to all hotel amenities and the ability to take advantage of a 1031 tax-deferred exchange. Condo hotels differ from other vacation home models in a variety of ways.
The Clavon concept has numerous advantages over other vacation models, including greater product consistency, fewer ownership conflicts and hassle-free rental opportunities.
Seldom-used vacation homes take time and money to oversee and maintain. With a condo hotel, you get the services and flexibility without the time commitment. The on-site management company takes care of all maintenance, finds renters and takes care of renters’ needs on-site.
You have full ownership of your condo hotel unit and may sell it at any time.
When you’re not using your unit, you may place it in the hotel’s rental management program and share the revenue it generates.
A condo hotel unit is an asset that you may sell at any time, and, you keep 100% of the profits.
Standardized furniture packages are often incorporated into the price, or at minimum, your turnkey unit should look like all the other units in the hotel
Units rented to hotel guests suffer wear and tear. Expect special Furniture, Fixture, and Equipment (FF&E) assessments to replace worn carpet, drapes, furniture, etc.
The rental program allows condo hotel owners to earn rental income and provides access to hotel services and amenities
Potential for tax breaks associated with mortgages and depreciation.
Maintenance free ownership because property managers handle all maintenance.