You've already learned about the abundant and compelling reasons why everyone wants a piece of Chicago luxury real estate (if you have ever heard the name Trump.) One of your most important decisions as a potential buyer is what type of property to purchase. As an investor or visitor to Chicago, a hotel-condo may be what you are looking for. Hotel-condos have become one of the most popular trends in vacation home ownership and real estate investments in recent years. You can acquire a luxury residential suite at a world-class resort, use your unit for a specified amount of time, and have the option of placing it into an organized rental program to generate revenue while you're away. Some investors never intend to stay in their unit and are using them for a stream of income and diversification.
Given the lack of Chicago hotel-condo information available to most buyers, the newness of the concept and the complexity of it, I’m bringing you this comprehensive overview to increase your awareness and understanding of the hotel-condo business model and the opportunities in Chicago.
Hotel developers like the concept because they spread their financial risk among the future condo unit owners. hotel-condo owners like it because they can acquire a luxury residential suite at a world-class resort, use their units for a specified amount of time, and have the option of placing them into an organized rental program to potentially generate revenue while they're away.
Sometimes hotel-condos are called hybrids because they combine an investment with second home or vacation home property features. Many developments offer an expanded array of hotel services that are available to owners when they are in residence. This could include valet, and concierge, maid and spa services, among other resort-style luxury benefits. The rental dollars you can generate from ownership in a hotel-condo can make this option appealing.
Available in both new and historic buildings, Chicago hotel-condos are usually large, high-rise, getaway destinations. Every major player in the hotel industry is looking at Hotel-condos, hotel-condo conversions and hotel-condo construction to see if it fits in their portfolios. Operated by notable names such as the Four Seasons, Ritz-Carlton, Sonesta, Starwood, Hilton, Rosewood, Regent International Hotels, Clarion, Conrad Hotels, Bulgari and Le Meridien, hotel-condos are traditionally found in seasonal resort areas but are also popping up in urban centers like New York, Atlanta, and, of course, Chicago.
The hotel condos in Chicago represent the most notable names for luxury, some names well known domestically, like Trump, and some just as well-know globally like Shagri-La and Mandarin. Chicago is a popular destination due to the strong domestic and international demand for second or vacation homes, as well as the amount of business conducted here. The Chicago luxury market could have as many as 1,000 hotel-condo units in the next few years.
Typically, the operator of the hotel-condo rental program, in exchange for a share of the revenue, markets your unit as a hotel, takes reservations, operates the front desk, and provides the services hotel guests expect, such as housekeeping, food and beverage and concierge.
Hotel-condos have investment appeal in today's market because of low interest rates and a tepid stock market that has caused investors to look for safer alternatives. In addition, U.S. lenders have been readily making loans on hotel-condos, both to domestic as well as international buyers.
Chicago hotel-condos differ from Chicago condos in a number of ways, including the extent of your voting rights, and your access to property books and records as a hotel-condo unit owner.
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Some hotel-condo projects literally sell-out in a matter of days or a few weeks!
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