If you’re looking into investing, you may have heard the term “condotel” or condo hotels – but are they really a good investment? Even when looking at the cost of an investment cottage, it’s tempting! Just think about it, instead of trying to sell something for an entire month (what you pay), you could charge hundreds of bucks a night every day of the month. But that kind of agreement only works out when you have guaranteed occupancy, which no property manager can ever offer. Unless you have a lot of money to invest in a premium property, you’ll want to be careful.
Let’s say you do buy into one of these developments, these luxury sky high deals with all the frills. You won’t find many things like this with Oakville real estate, but let’s just get hypothetical for the sake of arguing.
If you have a unit in a condo-hotel, or even a cottage, most of these developments build the units to the plain same specifications. Why would they choose your particular unit over another that has more reviews online? No one can promise you 100% occupancy, heck, many of these places can be lucky to get 40% occupancy! Sometimes this is just one of those situations where you’re going to
How Much Does it Cost to Operate?
You need to be able to break even when it comes to your cost of operation. You’ll want to not only add in the cost of your mortgage, but utilities, any insurance you cover for liability, costs of being licensed to rent out a room (illegal apartments are a big no no), and whatever costs it takes to keep it running month to month.
Think about how often you’re going to be able to rent this property. Is it just going to be a couple times a month? Is that going to pay for the cost of your Oakville real estate, even over a long term period? If you can’t figure out a plan before you buy, it’s probably a bad idea.
Luxury Isn’t All It’s Cracked Up to Be
A luxury condo-hotel may not be the best option for most investors, especially when the market is chock full of them at the moment. Luxury homes, condos and even townhouses can be better investment. If people can get a similar home nearby for a fraction of what they’d pay to live in your condo-tel for a month, they’re not going to bite. Invest wisely, don’t fall for the luxury moniker that only makes the developer money.
If you want to find a great investment property, let us help! There’s “luxury” and then there’s luxury – we know the difference. Give us a call today and see what difference working with the best Oakville luxury realtors, the Goodale Miller team, will make for your next real estate purchase. We’ll help you find the right choice for you, call today and put us to work for you!