Is a Condo Hotel in Chicago a Smart Investment?

Posted by Helaine Cohen on Friday, June 14th, 2019 at 12:30pm.

Chicago Condo Hotel CondosThe added amenities are certainly enticing, as is the promise of monthly income. But is a condo hotel really a smart investment? It turns out there are both pros and cons to consider.

If you’re hoping for the opportunity to make money off your investment, it’s likely easier to get the best price with a condo hotel. Booking software makes it simple for a room to go up or down in price depending on demand. That’s something you likely won’t have access to with a traditional condo.

You will, however, have to consider the revenue split you have to honor with the hotel operator. It can vary greatly. You’ll also want to consider the hotel brand. 

A brand boasting a higher premium likely translates to a higher daily rate and a stronger occupancy rate. For this reason, you’ll want to compare several different options to see what gives you the best value for your investment.

If you don’t want to worry about taking care of reservations, maintaining the amenities or the property, a condo hotel may work well for your situation. However, as the owner of the condo hotel unit, you will likely have to pay for things like HOA fees and real estate taxes.

For these reasons and more, make sure you find out exactly what you’re paying for, and what you could actually make, before putting any money down on a condo hotel.

Helaine Cohen, Chicago Real Estate Broker

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