Can A Condotel Be Completed On A 1073?

[Ken B]

Holy Crap! That condo unit in the link sold new in March 2006 for $369,900. There are no typo's there.

(No typos, but wrong unit at first.)

 

[Howard Klahr]

Performing a Condo hotel unit on a 1073 residential condominium form would be no different than using the 1073 form to do an appraisal on an office condo unit or an industrial condo unit. NO it is not appropriate.

Condominium is a form of ownership. Consequently the underlying property type of a condo hotel is a HOTEL not a residential unit. Not withstanding the issues regarding doing a sales comparison approach, an income approach on a condo hotel unit is far more complicated than doing an income approach on a traditional hotel. For the uninitiated, many of the condo docs for condo hotel properties have a cashflow waterfall approach to distribute proceeds and allocate expenses for the properties. Let alone the nuances of performing an analysis on hotel rates and occupancy applicable to the the unit.

Any lender attempting to obtain a residential appraisal on a condo hotel is doing so unknowingly because these are financed at rates and terms very different than residential loans.

 

[Meandering]

Thank you Howard

 

[Ms. Janet]

In Florida, a cert residential appraiser cannot appraise a condotel. Requires a cert general

 

[DTB]

I don't get the appeal other than maybe a 10% discount from a traditional condo? I'm sure the rental program takes a big haircut off the top too.

I also don't get time shares, maybe it's the same target market?

 

[J Grant]

Performing a Condo hotel unit on a 1073 residential condominium form would

The one I did recently was not a condo hotel unit. They were condo units with bylaws/ HOA allowing weekly rental and owners could opt to put their unit into the rental pool, with management hired to provide housekeeping, rental of units etc in exchange for a percent of the rent. No hotel ownership of any of the units nor common area.

 

[Meandering]

In Florida, a cert residential appraiser cannot appraise a condotel. Requires a cert general

Oh no,

JGrant said he/she did some of these.

 

[J Grant]

Time shares, (typically), you dont' own the unit you only own right to use it or rent it out two weeks a year (or whatever length of time you buy) . Condotel, at least the ones i did, are condos with ownership of individual unit. The condo building's bylaws and HOA allow short term rentals and unit owners who choose to rent, hire a management company (could be a hotel company), to manage the condos as rental units in exchange for a percent of the rent (or however they choose to pay out). Often the condo units are put into a rental pool with rotation..

as far as other types of ownership or hotel involvement/ownership cant' common what they are..

 

[Howard Klahr]

I don't get the appeal other than maybe a 10% discount from a traditional condo? I'm sure the rental program takes a big haircut off the top too.

I also don't get time shares, maybe it's the same target market?

Condo hotels are not remotely comparable to a "traditional" condo and there is no correlation between prices at all. The reference to "traditional" condos is also not appropriate in that once again condominium is a form of ownership NOT a type of property. Condo hotel buyers are not the same as timeshare buyer either. Each of these are distinctly different types of properties, ownership interests and ownership rights.

You would not use a self storage facility to compare to warehouse properties, nor would one use a regional mall to compare to a strip center.

 

[J Grant]

A she only ! Yes i did several and they were all condo units in condo buildings with their own HOA and each unit individual owned, see above.