Considering a Condotel in Hawaii? Here's the Inside Scoops

Hawaii beckons with its paradise vibes, and condotels offer a unique way to own a piece of the dream. But are they the right fit for you? Before we explore the pros and cons of condotel ownership in the Aloha State, let's take a look at what exactly is a condotel.

A condotel is a type of property that combines the features of a condominium and a hotel. Essentially, it operates like a hotel in terms of management and services, but the individual units are owned by different people, similar to condominiums.

Owners of condotel units typically have the option to use their units themselves for a certain period, and the rest of the time, the units may be rented out as hotel rooms. Condotels often offer amenities and services similar to those found in hotels, such as housekeeping, concierge services, and recreational facilities.

The concept is popular in tourist destinations such as here in Hawaii where vacationers might prefer the amenities and services of a hotel but also want the investment potential of owning property.

Pros:

• Income Potential: Rent out your unit when you're not using it, generating income to offset ownership costs. The on-site management handles marketing and guest services.
• Resort Living: Enjoy hotel-like amenities like pools, spas, concierge services, and housekeeping – all without lifting a finger.
• Prime Locations: Condotels are often situated in popular tourist areas, putting you close to beaches, restaurants, and attractions.
• Lower Maintenance: Unlike a traditional vacation home, you won't be responsible for all the maintenance and upkeep.

Cons:

• Limited Personal Use: Rental programs may restrict your ability to use your unit whenever you want.
• Fluctuating Rental Income: Tourism fluctuations can impact rental income. Be prepared for potential dips in revenue.
• HOA Fees: Expect higher homeowner association fees to cover hotel-style amenities and property management.
• Less Control: You'll have less control over the unit compared to a traditional vacation home. Renovations or design changes may be restricted.

Other Important Considerations:

• Leasehold vs. Fee Simple: Some condotels in Hawaii are leasehold, meaning you own the building improvements but not the land itself. Factor in lease extension costs. Learn the basic differences between Fee Simple and Leasehold by visiting our Blog: Fee Simple Versus Leasehold.
• Vacation Rental Regulations: Research local regulations on short-term rentals, which can affect your rental income potential. Visit the City and County of Honolulu's website for an explaination of Short-Term Rentals (STR).

The Verdict?

Condotels can be a good option for a second home, or for investors seeking income property in a desirable location. However, if you prioritize personal use and control over your space, a traditional vacation home might be a better fit.

Remember: Do your research! Carefully evaluate the specific condotel, management company, and rental program before investing. Consulting a Hawaii real estate expert can help navigate the unique intricacies of the market.

View Popular Condotels For Sale on Oahu: Ala Moana Hotel Condo, Island Colony, Luana Waikiki, Ritz-Carlton Residences, Trump Tower Waikiki, Sky Ala Moana East, etc.

View Upcoming Condotels For Sale on Oahu: 1500 Kapiolani

Interested in purchasing a condotel?  Connect with one of our local market experts Agents.