FOLLOW US ON SOCIAL MEDIA
Home Blog About Privacy Policy Terms of Service
PinoyProfessionals.com is a Filipino Professional social community platform. Submitted contents ownership belongs to contributing user unless otherwise specified.
Copyright © 2024. All Rights Reserved.
hi mr. rey, i just want to know how the condotel works. if we invest in this, how do we earn from the condotel that you are selling and how much are you selling the condotel units?
From: imee Guest /Jun 29, 2009 permalink reply (3)
In a condotel, individual buyers purchase the condotel units, which physically resemble traditional hotel rooms. When the condotel-owners are not in residence, they put their units into a rental pool. The hotel then is responsible for renting the rooms. The hotel and unit-owners split the proceeds.
Although condo-hotel combination properties have been around for about 20 years, primarily in southern Florida, they were often developed in conjunction with unflagged -- or nonfranchised -- hotel properties. As a result, they had limited marketability and experienced limited popularity.
While these properties have become more popular in the past four to five years, the relative newness of this market still affects the developer and the buyer. Indeed, condotels have many strengths and weaknesses. To analyze a prospective condotel property effectively and arrange the smoothest transaction possible, brokers should be aware of all aspects of unit and property ownership.
Potential strengths
Part of what makes the condotel a potentially lucrative investment for developers is the perks it offers the buyers of the individual units. Perks to buyers translate into greater unit sales for developers.
A primary benefit to buyers is that condotels offer an alternate or vacation home without the full responsibility of a second home. In fact, because a unit-owner's time in the condotel is limited by the rental process, the property type is designed to be a secondary, not a primary, residence. The unit-owners also enjoy the hotel services provided by the hotel.
Further, buyers can recoup some of their initial investments through rental revenue that is completely arranged by the hotel. Unit-owners typically receive about 50 percent of the total revenue attained through renting the room. This additional income helps with some of the expenses associated with the unit, in addition to some of the mortgage.
For developers, condotels allow them to repatriate most of their equity. The profit is delivered upfront with the sale of the units. Developers can further make money with these property-types by maintaining ownership of the hotel's public spaces such as the bars, restaurants and meeting facilities.
Top Ten Things to Consider When Buying a Condotel
1. Desirable Location
2. Price Comparison of Standard Condominium to Condo-Hotel Unit
3. Property Management
4. Annual Ownership Costs.
5. Competitive Condition Sustainability
6. Commercially Competitive Location
7. Historical Rates and Occupancy of Competitive Hotel within the Market Area
8. Specific Commission Structure, Deductions and Costs
9. Ease of New Competition to Enter the Market
10. Asset Management Utilization
As published in Scotsman Guide's Commercial Edition, October 2006.
Condotel Income Projection
INVESTMENT COMPUTATION
1 BR Condotel Unit - Area: 28.72 sqm
Investment Value: Php. 1,625,552
20% Down Payment: Php. 325,110
Additional Furnishings @ P8,500/sqm:Php.244,120
Less:Reservation Fee: Php.20,000
24 Monthly Investments:Php.22,885
80% Balance thru bank financing (indicative rate):
Php. 1,300,442
5 years @ 10.25%: Php.27,791
10 years @ 11.00%: Php.17,914
15 years @ 11.50%: Php.15,192
Condotel Investment Opportunity: Location
Full Service Hotel Rate
Makati City & Ortigas Center Php.5,000/day ($100)
Quezon City Php.2,400/day ($ 50)
At Php. 2,400/day X 30 days= Php. 72,000/month
At 50% Occupancy Rate= Php. 36,000/month
Income Sharing
50%--Unit Owner
50%--Hotel Operator
Return of Investment
Present Value of 1 Bedroom Condotel Unit (28.72 sqm): Php. 1,863,928(including furnishings)
10-year Resale Value Projection: Php. 4,000,000
Initial Investment:
Reservation:Php.20,000
Down & Furnishings in 24 months:Php.22,837/month
Total Investment for 24 months:Php. 568,082
10-year Resale Value Projection:Php. 4,000,000
Less: Initial Investment: Php.568,082
Return of Investment: Php.3,431,918
BAYO CONDOTEL & SUITES BENEFITS:
(CONDOTEL UNIT BUYERS ONLY)
1. At Bayo Condotel you own a specific Condotel Unit and have Condominium Certificate of Title in your name once it is fully paid.
2. Bayo Condotel Owner will get a 30-day FREE stay benefit commences at the start of every fiscal year. This will be distributed to the Unit Owner in terms of certificates where they are entitled to priority in booking even on peak seasons provided the availing of the 30-day FREE stay is exercised and availed of by negotiating in advance the use of the unit.
3. Bayo Condotel Owner may use his 30-day FREE stay for more than one unit at the same duration, provided that it would be the same unit type. For example, if an owner will stay in the condotel for a week and he will rent another unit for his family or friend, he will consume a total of 14 days for the week chargeable to his 30-day FREE stay.
4. If the usage will exceed 30 days, they will have to pay the member’s rate which is 30% discount from the regular rate.
5. If the Condotel Owner was not able to use the 30-day FREE stay benefit. Subject to 2 months prior notice before expiry, the unused 30-day FREE stay maybe transfer/authorized his friends or relatives to use it. Advance booking and registration is required subject to the availability of room units.
6. While the condotel is under construction, Buyers who pave paid the units and have a with 30-day FREE benefits may avail it at Sir William’s Hotel located at No. 39 Timog Avenue, South Triangle, Quezon City on a pro-rata basis as follows:
a. 100% payment – 30 days free
b.50% payment – 15 days free
c. 30% payment – 7 days free
d. 20% payment – 5 days free
7. If the Condotel Owner does not use his FREE stays on peak season, he will receive a bonus on those days equivalent to room rate difference on regular days.
8. Bayo Condotel Owner can upgrade his FREE stay to different Unit category, provided that he has to pay the difference in room rates.
9. Bayo Condotel Owner will receive an income from the Hotel operation.
10. In order to maximize returns and ensure cost efficiency for Condotel Owner, only room revenues and room divisions related expenses are considered in the determination of income such as housekeeping, laundry, front office, security, repairs and maintenance, utility, taxes and insurance attributable only to the units. Food and Beverages (F&B) and its related expenses as F&B personnel, kitchen equipment, supplies, utilities, taxes and insurance are treated separately from and independent of the room divisions expenses of each Condotel units. This setup assures the Condotel Owners a cost efficient operation as room related expenses are easily controlled and managed.
11. Dividends shall be payable quarterly in checks to be mailed or paid directly to the bank accounts of Condotel Owners.
12. Bayo Condotel Owners will still receive quarterly income based on the type of unit regardless of whether the unit was rented or not. Hotel operator will pool together its entire total income from rental operations and distribute this to the Condotel Owners as dividends according to the pro-rata percentage sharing on unit types. Income will come from room revenue less room division expenses.
13. BayoCondotel Owners can not live in their property full time. Condotel is for Investors Only. Condotel Owners are required to enroll in the Condotel Operations for a minimum of ten (10) years with further option available to the operator which he is likely to invoke to extend the term on expiry subject to mutual agreement as per majority vote of the Unit Owners Association.
14. Sir William’s Hotel will be the Hotel Operator to manage the Condotel and to provide financial, operational and property management of the Condotel Units.
15. Hotel Operator will receive 50% shares on the gross income of the Condotel.
16. As a premium responsibility to the Hotel Operator, if total expenses do not exceed 30% of net sales, which shall result in a 50% gross operating profit before income tax, an additional 3% of net income will be given as a bonus to the Hotel Operator.
17. Minor and major repairs are shouldered by the Hotel Operator and chargeable to and part of the operating cost covered in the estimated 50% Hotel Operator’s share.
18. All “Bayo Condotel & Suits” Unit Owners are automatically members of the Condominium Association and pay association dues but for Condotel Owners, Condominium Association Dues are charge to the Hotel Operator and part of the operating cost covered in the estimated 50% Hotel Operator’s Share.
19. The Condotel Owners will pay their INSURANCE PREMIUM share to the Condominium Association.
20. Upon operation of the Condotel, investors will receive percentage of income.
From: Rey Sinena","media":[]} Guest /Jun 29, 2009 permalink reply
From: Rey Sinena Guest /Jun 29, 2009 permalink reply
From: imee Guest /Jun 29, 2009 permalink reply