Condotel Investment 101: The Pros and Cons

Condotel investments in the Philippines are quickly gaining traction because it’s a great way for individuals to own a piece of paradise in the city and experience luxury whenever they desire. The best part? The property can earn money without you needing to manage it at all. This makes it an extremely desirable option for people looking to expand their passive income sources.

Real estate is one of the most valuable assets one can have. The reason why is the value of real estate often appreciates over time, making it a great way to safeguard your finances for the future.

Investing in one of these hybrid properties shouldn’t be taken lightly. When looking to invest, you must consider its location.

One of the best places to look into if you want to invest in one of these hybrid properties is the Manila Bay Area. The Manila Bay Area’s growth over the years has been continuous and at this rate, it’s set to become an economic center. As of 2024, it’s already home to some of the country’s most prestigious hotels, businesses, and shopping centers, making it more evident that it’s becoming the place to be. Because of the area’s growth condos for sale in the Bay City are quickly rising in prices, so if you’re thinking about buying property in the area, the best time to buy is now.

However, before you commit to such a huge investment, we want to make sure that you have all the facts at hand, so you don’t get buyer’s remorse. In this article, we’ll tell you all about the pros and cons of owning a condotel unit.

What is a Condotel?

Condotels are short for condominium hotels. These types of properties are unique because they provide investors with the ownership aspect of a condominium, but they operate as a hotel. It’s a great worry-free real estate property that you can invest in and enjoy every now and then.

Over the years, the number of properties offering condotel investments in the Philippines has increased due to Manila’s development. Condotels are extremely attractive properties because these investments are often located in highly coveted locations. Combine these desirable locations with top-notch property management and luxurious amenities, and you have yourself a profitable asset.

Since condotels are still essentially hotels, these properties are manned by hospitality professionals who are ready to serve. So, everything from the front desk, concierge, and housekeeping services are available to short- and long-term residents of this property.

What are the Pros and Cons of Condotel Investment?

Condotels are very desirable investment properties to have. But, before you dot the I’s and cross the t’s, you may want to find out what the pros and cons of owning a condotel are first. After all, investing in a condotel is a very big commitment.

In this section, we dive into the pros and cons of investing in a condotel.

Pros of Condotel Investment

First up, we’ll go through the pros of investing in a condotel.

Optimal location

Real estate investors know that location plays a crucial part in the property’s value: the better the location, the higher the appreciation. This means that by investing in a property that’s located in an area that’s easily accessible, in the proximity of essential establishments, and is constantly being developed, then you may just get amazing returns on your investment.

One thing that condotel developers consider is the location. More often than not, condotels are found in prime locations that make them desirable for investors and travelers.

The optimal location of these condotels isn’t just beneficial for guests who stay at your condotel, but they can also be of great use to you. As a condotel owner, you’re entitled to several days in a year to stay at your property, so you can also enjoy your investment.

Hospitality

Hospitality plays a crucial part in a traveler’s stay. It’s one of the biggest aspects that travelers consider before booking a stay anywhere. We can see this in the way that visitors go through Airbnb host ratings and user-generated ratings on Agoda before they decide on where to stay.

So, while the stars that a hotel may boast can help shape the perception of guests, the way guests are treated will remain to be one of the top considerations for booking a hotel.

Given the importance of guest relations, it’s good to remember that the property managers of condotels run the day-to-day operations and handle the hospitality aspect of your investment. The property managers are expected to bring in a team of professionals who are ready to cater to your guests’ needs – allowing you to deliver on-point service without having to lift a finger.

Passive Income Stream

Diversifying your investment portfolio is a great way to future-proof your finances, but it can also be an excellent method to expand your income streams. Condotels provide its investors with the benefit of passive income, which can help supplement their income.

As your property continues to operate, you’ll be entitled to regular rental payment cheques. Depending on the developer you’ve signed on with, you may get between 60 to 80 percent of the income, while the management company gets the remainder. Usually, the rental income is in favor of the owner.

Aside from providing a passive income stream, real estate investments are historically known for appreciating over time. Meaning your property could be worth a lot more if you decide to sell it in the future. Condotels are an excellent type of asset to consider if you want to outperform inflation.

Professionally Managed

Whether this is your first foray into property investment or not, you must already know the importance of properly managing your investments. Properly maintaining real estate investments means maintaining the property’s surroundings, ensuring that the plumbing is working, and conducting major repairs as soon as needed. This can be a hassle if you’re not regularly checking up on your investments.

If you don’t have the time to manage your property, investing in a condotel may be the right decision for you.

Condotels are managed by world-class professionals. These professionals don’t just make sure that your unit is in tip-top shape, but they also ensure that the amenities your condotel boasts are kept in good condition. That being said, it’s clear that excellent property management practices are key to a good return on your investment so, you must make sure that you’re investing in the right condotel developer.

Modern Amenities

The truth of the matter is that when staying at a hotel, amenities play such a huge role in attracting customers. Whether the guests are foreigners or locals, amenities can attract them to stay at your property.

Developing amenities can be quite expensive. The cost of fitness centers, swimming pools, and 24-hour security can be exorbitant, and this doesn’t include the maintenance fees yet. On your own, putting up these amenities can be impossible. But when you invest in a condotel developer, you can put up all these amenities without shouldering the financial burdens on your own because your money has been pooled with other investors.

Secure Properties

In a bustling district such as Manila’s Bay Area, there can be a large number of people going in and out of the property, which can pose security risks. Condotels make travelers feel safe by employing security firms for the property. This ensures that guests can rest easy knowing that they’re safe in your investment property, making it much more desirable for guests.

Given that there are a lot of investors in the property, the burden of paying for security fees won’t rest solely on your shoulders.

Cons of Condotel Investment

You’ve learned all about the many benefits of investing in a condotel, but it’s good to know that there are also drawbacks you may need to consider before committing to it.

Here are some of the cons of investing in a condotel:

Limited Control

While condotels allow you to have an investment property that runs itself, one thing to consider is that you will have limited control of the property.

Because your condotel is part of a brand, you won’t have free reign of the way it’s designed. So, you won’t be able to personalize it according to your tastes because it must follow the property management’s standards.

You should also expect to have limited powers in decision-making regarding your unit’s maintenance, operations, and marketing.

Maintenance Costs

As a condotel owner, you’ll still be financially responsible for a share of the maintenance fees. Yes, even if you’re not running the day-to-day operations, you’ll still need to pay your share of maintenance and even for any damages that may occur in your unit unexpectedly.

Usually, these maintenance costs are taken out of your earnings, making it extremely convenient for you because you won’t need to shell out money to pay for these expenses.

Market Fluctuation

All forms of investments are not immune to the market’s whims – even real estate, which is already one of the safest investments one can make.

As with any company that offers accommodations as a product, the market’s status can severely affect occupancy rates and tourist influx. So, if the market isn’t doing so well, you can expect a lower number of guests and thus, lower rental income.

Investing in Your Future with Anchor Land

Investing in a condotel has its set of pros and cons. So, while there may be a lot of pros to investing in a condotel, don’t forget to take the cons into account especially given how hefty they are. However, if you’re okay with not having complete control over your property, then you should definitely pursue investing in a condotel – just make sure to choose a developer with a good reputation.

A condotel is a huge investment and you want to make sure that you’re entering a partnership with a developer that knows what they’re doing. You should also make sure to study the project beforehand and conduct your research before signing the contract.

One of the best places to invest in right now is the Manila Bay Area because of its promising development status. If you’re looking to invest in this area, you should consider investing in Anchor Land’s condotel development. Anchor Land’s newest project is Copeton Baysuites, which is located close to Manila’s premier shopping centers and luxurious entertainment areas. Its location is also extremely desirable because of its proximity to national roads and airport terminals.

Invest in your future. Reach out to us today!