The Las Vegas Condo-Hotel Concept
The veritable explosion of high-rise condo construction in Las Vegas has not only dramatically altered the city’s skyline, but has considerably altered the lifestyle of many Las Vegans, and the repeat visitors to our city.
Prior to the proliferation of hi-rise condos in Las Vegas, repeat visitors such as vacationers, businessmen and women, and high rollers would primarily check in at a hotel, motel or, depending on the reason and length of stay of the visit, rent a private home on a temporary basis.
The availability of conveniently located luxury condos convinced many of these repeat visitors that it would make economic sense to purchase a Las Vegas Condo home of their own, that in the long run would build equity, and be more cost-effective than renting a hotel room or suite and dining out for every meal.
Additionally, many investors were attracted by the offer of many of the big name luxury hotels such as the Ritz-Carlton, Sonesta, Starwood, Hilton, Trump, Four Seasons, etc. to purchase units (condo-hotel homes) that are part of the hotel structure, or luxury units built as adjacent structures to the hotel, such as Palm Towers, for example.
These condo hotels offer owners who plan to use their purchases as vacation homes, or use the condo intermittently on business trips, the opportunity to temporarily rent out their units when the owners are away.
Benefits are twofold. The owner agrees to place the property into an organized rental program, saving the unit owner the trouble and expense of self-advertising, and rental revenue, shared with the rental program operator, allows a portion of the rental fees to be credited to the condo owner.
The operator of the rental program who shares rental fees with the owner, performs a number of services on behalf of the property, among which are marketing the unit to temporary renters as a hotel, maintains the property, supervising the front desk, overseeing housekeeping services, providing- concierge services, and food and beverage services.
Another attractive aspect of condo hotel ownership that has appealed to investors is that these units can be sold at anytime by the owner at his/her discretion.
The vacation home convenience and income potential of owning these units was an irresistible attraction to many investors who are frequent Las Vegas visitors, however, these purchases have proven just as vulnerable to the downturn in the nation’s economy as has the rest of the housing industry.
Additional information that a potential condo-hotel unit buyer should be aware of before considering this kind of investment will be covered in a follow up article, and will include such details as:
- Typical buyer/management agreements
- Guarantees –if any – offered to the buyer
- Analyzing the units for best location, amenities, etc.
- Key elements to look for when analyzing the profit potential of a condo-hotel purchase
Feel free to give us a call at 702.376.0088 with any questions about the Las Vegas High Rise Condo market.