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 🏢 The Ultimate Condotel Ownership Guide

Are you looking for a hybrid investment that offers the luxury of a hotel and the ownership benefits of a condo? A condotel might be the perfect fit for you. Learn everything you need to know about condotels, how they compare to traditional condominiums and hotels, and the financing options available to investors and buyers.

🔹 What is a Condotel?

A condotel (condo-hotel) is a unique type of real estate that blends condominium ownership with hotel-like services. These properties are typically found in high-demand vacation and resort destinations and are operated as hotels, offering amenities such as front desk service, housekeeping, and resort-style pools.

When you purchase a unit in a condotel, you own a deeded property but can opt to have it rented out through the hotel’s management program when you're not using it. This makes condotels attractive investment opportunities for those looking to generate passive rental income while enjoying the benefits of a vacation property.

🔹 Mortgage Loans Available for Condotel Purchases

Financing a condotel purchase is different from traditional mortgage financing. Because condotels are classified as non-traditional real estate, conventional mortgage lenders may have stricter requirements. However, various loan programs are available for qualified buyers:

🔹 Portfolio Loans

✅ Offered by banks and credit unions that hold the loan in their portfolio rather than selling it to investors.

✅ Higher down payments (typically 25-30%).

✅ More flexible underwriting guidelines.

🔹 Non-Warrantable Condo Loans

✅ Used when the condotel does not meet Fannie Mae or Freddie Mac requirements.

✅ Interest rates may be slightly higher than conventional loans.

✅ 20-30% down payment typically required.

🔹 Jumbo Loans

✅ Available for high value condotel properties exceeding conforming loan limits.

✅ Strict income verification and credit score requirements.

✅ Down payments can range from 25-40%.

🔹 Debt-Service Coverage Ratio (DSCR) Loans

✅ Ideal for investors, as qualification is based on the property's rental income rather than personal income.

✅ No tax returns required.

✅ Down payment: 20-30%.

🔹 Cash and Private Lending

✅ Investors who want to close quickly may opt for hard money loans or private financing.

✅ Higher interest rates but fewer qualification hurdles.

✅ Short-term options, ideal for flipping or quick investments.

Why Invest in a Condotel?

1️⃣ Passive Income Potential

Earn rental income by participating in the hotel management program.

2️⃣ Resort-Style Living

Enjoy world-class amenities when staying in your unit.

3️⃣ Appreciation & Asset Growth

Over time, properties in prime vacation destinations can increase in value.

4️⃣ Tax Benefits

Condotel owners may be eligible for tax deductions on property expenses, depreciation, and mortgage interest.

5️⃣ Diversified Investment Portfolio

A condotel can be a great addition to an investor's real estate portfolio, providing both usage and income potential.

🔹Potential Risks to Consider

✅ HOA Fees & Management Costs: Higher maintenance fees compared to      standard condos.

✅ Financing Challenges: Limited mortgage options and higher interest rates.

✅ Usage Restrictions: Some properties limit personal use to maximize rental revenue.

✅ Market Dependency: Rental income depends on the tourism and hospitality market.

🔹Find the Perfect Condotel Investment

If you’re ready to explore condotel ownership, our team of experts is here to help. Contact us today to get a personalized investment analysis, loan pre-qualification, and access to the best condotel listings in the market.