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Florida is market leader in growth of hotel condominiums

Luxury hotels that sell some or all of their units as condominiums is now an established trend in the hospitality industry in Fort Lauderdale and around Florida and the world.

Condo-hotels once found only in ski resorts or Hawaii are now becoming established in tourist destinations like Fort Lauderdale, Orlando and Las Vegas as well as urban centers like Atlanta, Chicago and New York.

The concept allows hotel developers to spread their financial risk among the future condo unit-owners.

The concept also permits condo owners to enjoy the resort-style luxuries in their vacation homes while in residence, and in many cases the hotel rents out their units when they're away.

Though the percentage of revenue that comes back to the owner of a typical hotel condominium unit varies, the AP story noted an owner in Miami's Fontainebleau who receives 45% of the income.

Hotel condominium units are a different and some believe more attractive investment than timeshares, because a condo-hotel unit is purchased by its owner outright while a timeshare owner only owns the time that he or she occupies a unit.

The condo-hotel concept is hotter in Florida than anyplace in the country. Nearly thirty projects are currently under construction in South Florida. The Orlando area and the Miami-Fort Lauderdale area each could have as many as 10,000 units in the next few years. Each metro area had less than 1,000 units five years ago.

In Fort Lauderdale, luxury hotel condominiums are established or being built by Hilton (Il Lugano, Q Club), Starwood Hotels (The Atlantic), W Hotels (W Hotel and Residences) as well as the Trump Organization (Trump International Hotel and Tower) and The Saint Regis.

Buyers can purchase with confidence when a first rate hotel operator they know and recognize as a mark of quality puts their name on one of these projects, and because of that the concept has reached a very high level of acceptance.

According to the AP article noted above, "The Ritz-Carlton Hotel Co., in fact, won't even manage a hotel anymore unless there is a residential component because of the lucrative nature of the condo-hotel concept, spokeswoman Vivian Deuschl said. The Chevy Chase, Md.-based luxury chain first became involved almost five years ago with the concept in Washington, Boston and New York. The company recently opened condo-hotels in Dubai and Berlin."

The improving performance of hotel companies overall has contribued to this trend, and Fort Lauderdale real estate's appreciation in recent years has made the area's real estate a far more attractive investment than the stock market in recent years.

Low interest rates are also helping the hotel condominium trend in Fort Lauderdale, as well as the large population that is nearing retirement and buying second and often third homes.

The condominium-hotel concept is perfectly suited to buyers who want the advantages of owning a second home, and the carefree experience of staying in a luxury resort hotel.

Ask Andy about the various hotel condominium investment opportunities in Fort Lauderdale, how they compare to one another and how they compare to investment opportunities elsewhere.

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