Since the condo hotel concept is so fresh, it is often confused with timeshares, a popular holiday home option that has been in existence since the 1970s. In fact, condo hotels in Gran Canaria have many attributes that set them apart from timeshares and make them appealing to a unique sector of the second home market. Here’s a contrast between both of these types of real estate investment.
FLEXIBILITY IN USE
Timeshares – When you purchase a timeshare, you choose not just a set location but also a particular week or two that you may use your vacation home annually.
Condo Hotels – With a condominium hotel, you have flexibility to use your unit when you desire. Keep in mind, however, that some condo resorts do have dwelling constraints that keep you from earning your condo a permanent residence.
Timeshares – The average timeshare includes a neighborhood pool and some common areas.
Condo Hotels – Condo hotels have lots of the amenities you’d find at luxury hotels. In addition to a pool (or pools), there’s probably an on-site restaurant (possibly several), a sofa, a full-service spa, a state-of-the-art exercise center, a poolside bar, etc..
Timeshares – Timeshares are sold fully furnished. The standard of furnishings depends on the individual development. The cost for those furnishings is built into the price.
Condo Hotels – Condo hotel units are offered completely furnished typically with high-end furniture, appliances and fixtures selected by a professional interior designer.
Timeshares – In a timeshare, you are responsible to your housekeeping and apparatus upkeep throughout your stay.
Condo Hotels – You get daily housekeeping as you would in a luxury resort. You’ve got access to room service, concierge services, maintenance providers and check-in services. The vast majority of condo hotels are run by big-name hoteliers like Ritz Carlton and Hilton, the consummate professionals when it comes to client service. Most of the same services offered at their luxury resorts are offered at their condo resorts.
Timeshares – Timeshares are in highly-desirable resort areas.
Timeshares – Prices for timeshares vary considerably but are generally lower than condo hotel prices because you are only purchasing one or two weeks of use. In addition, you do not receive any of the revenue generated during the 50+ months that your timeshare unit is utilized by others.
With timeshares, as far as 40%-50% of the price goes to sales commissions. Why are the revenue commissions so significant? The developer must keep a large sales force in order to make roughly 50 earnings for every unit (one for every week of the year).
Condo Hotels – You get deeded ownership to the property. Even more costly, condo hotels tend to offer you more for your money than timeshares. More of your buck goes into”bricks and mortar” high-quality finishes not earnings.
Additionally, when not using your condo hotel unit, you can place it in the direction’s rental program and receive a proportion of their revenue it creates, helping to offset your maintenance expenses and debt service.
RENTAL INCOME POTENTIAL
Timeshares – You have the option of renting out your timeshare to someone of your choosing or placing it in a rental program in the event you decide not to use it throughout your allotted week. If you take part in the rental program, you will split the revenue made with the home’s management company. Bear in mind, you are just renting out the one or two weeks per year that you own.
Condo Hotels – Like a timeshare, you have the choice of locating your own renters or setting your condo hotel unit into the rental program. You may participate in the rental program and get a part of the earnings it generates any time that you are not occupying your unit, whether it be for one night or 365 each year.