condo hotel Archives - Lazy Man and Money

Happy Beach Dog — Beach Dog Says: I love my new condo hotel home!

I started writing Lazy Man and Money in 2006 due to a unique wake up call: My fiancé was going to retire at age 43, with a military pension due to 20 years of service.

Who wants to work another 22 years after their spouse retires? At the age of 30, I could look to retire in about 12 years with her, or work 3 times as long and retire at 66.

My mission: Explore and build income streams.

I didn’t know you could make money with a blog, but I did know that it could help you connect with like-minded people. (This was when social media was defined by MySpace.)

Around that time I had read that investing in hotel rooms was a hot new market. This isn’t just buying shares in publicly traded hotel company. This is buying something called a condo hotel.

What is a Condo Hotel?

A condo hotel is exactly what you may imagine it is: a combination between a condo and a hotel. Basically it works like this: You buy the hotel room as if it’s a condo. You can stay in that room whenever you want (it’s your room after all). Alternatively, you can release the room back to the hotel for a split of the proceeds when it’s occupied (the hotel gets money for managing it). The rules seem to be different for each property, but that’s the gist.

It’s legally managed like a condominium, but the operated as a hotel. When I first heard of this back in 2006, it seemed like a crazy, but cool idea. Nowadays, it makes more sense to think of it as a condo that you buy with the intention of turning it into an AirBnB.

Sounds like an exciting investment right?

Why I seriously considered buying a Condo Hotel

I find that often get enamored by the best case scenario.

Even if I had to pay fees for maintenance, at $150 a night is over $50,000 a year. This was also around the time that Paris Hilton was starring in the Simple Life. Not everyone is able to start or buy a whole chain of hotels. However, one room? That’s something that an individual investor might be able to do.

Around the same time that I was reading the article above, I had heard that the The W in Las Vegas was looking for investors. The main big investors were in place, but they were looking for individuals to buy in. That helps with their building costs too, right?

I was definitely attracted by four things:

It’s tempting to be a landlord and an hotel owner without having to do any of the maintenance, right? (Of course I’d still be paying for the maintenance, it’s just great not to get those 3AM calls about a broken water heater.)
The premium W brand and quality. At the time, I had a friend who traveled a lot for business and he really loved the W brand.
The premium tourist location – Las Vegas. When I think of people vacationing in Las Vegas, I presume that a certain large number have a lot of disposable income. I like the combination of people with a lot of money looking to spend it on a luxury experience.
The pre-construction pricing, which I presumed would be the best rates. While this is not always true, it feels like the early bird should get the worm, right?

Ultimately, I decided not to buy into the W condo hotel opportunity. If you’ve read the Wikipedia write-up that I linked above, you know I made the right decision. It sounds like it was an unmitigated disaster.

Why I didn’t buy a Condo Hotel

One of the easiest ways not to buy something is to literally not have the money. I might have been able to make some terrible financial decisions like sell off some retirement accounts (absorbing a big penalty) and leveraging a mortgage. That’s not a good idea for almost any investment scenario.

Let’s pretend that wasn’t an obstacle. When I reached out to the the organization planning it, I found that it was impossible to get all the numbers. For one, they didn’t know what vacancy rates might be. They certainly had a better idea than me as they were in the business and familiar with the area. I was working with no knowledge. If the place has a high vacancy rate, there’s not going to be a lot of profit for me to sell my room. (I’m not ready to buy a white lounge lizard suit so I would have needed it to be rented.)

However, even if they had good vacancy and nightly cost estimates, they couldn’t give them to me. If they give out that information, the condo hotel qualifies as a security to the SEC and gets regulated much more rigorously.

Where Can I find a Condo Hotel?

Typically condo hotels are in resort places like Orlando or Miami in Florida and, of course, Las Vegas.

I wish I knew some reputable companies to work with. This is why I felt a little better working with a big trusted brand. I don’t think I would have given my business to Joe’s Condo Hotel Sales ‘R Us. If you know a trusted, household name that works in this area, I’d love for you to leave a comment with that corporation’s name.

Lessons Learned from My Condo Hotel Experience

When I decided to do this review, I wanted to pluck out all my nose-hairs for even considering it in the first place. However, I as I reflect more about it, I am taking a more balanced view. I’m not sure if all condo hotels are a bad idea. Perhaps it could work for some people in some situations. I’m trying not to make a blanket judgment based on one ill-suited (to me) condo hotel that seemed to have difficulty.

After all, this condo hotel example is precisely why I started this blog. I wanted to share ideas to sort out which are good and and which are not so good.

I did find one example of someone who did find a condo hotel that works great for them. My friend J$ did the heavy lifting in an interview with someone who lives in a condo hotel.

I hoped that readers would help me by keeping me grounded from bad ideas. Along the same lines, I wanted to help others where I can as well.

It’s always great to have discussion around a topic. That why I am begging you to leave comments at the end. If there’s one topic that needs more discussion, it’s condo hotels. I rarely see anyone talking about them.

Earlier this month, while you weren’t looking, Lazy Man and Money celebrated it’s two year birthday.

The Good and The Bad

The other day, I looked at some of my first posts and I laughed and cried about the roller coaster of good and bad ideas I’ve had when starting out. Two years ago, I was seriously considering buying a condo hotel in Las Vegas. Good thing I didn’t because a year later the W in Las Vegas was canceled. I rationalized my decision this way:

In the end, I feel that it’s probably pure speculation. Something that you buy to flip in the first year or so. I believe it would work out to be a gain, but giving the size of the risk (10% down would be around 1/3 of my net worth), it’s not something that I can get into.

When I read that recently, I wanted to set my nose-hairs on fire for even considering it. Looking back on it, the condo hotel example is precisely why I started this blog. I wanted to share ideas to sort out which are good and and which are not so good. I hoped that people would help me by keeping me grounded from bad ideas. Along the same lines, I wanted to help others where I can as well.

Every single night the same arrangement, I go out and write and write

Recently, I’ve been feeling that Lazy Man and Money has run it’s course. The battle’s done and we kind of won. What started out as cookie dough had indeed become cookies… and much more cooking would have made them ashes. Three thoughts are leading down this path:

Can I really write about personal finance indefinitely and keep it interesting? I never want to write a post about 72t distributions and I’m hoping to you don’t to Lazy Man and Money to read about them.
Are we still learning on Lazy Man and Money? I can only speak for myself on this one, and I have to say that I’m learning less and less. This isn’t unexpected. Everyone always learns more in the beginning and, as they become more proficient, learning slows.
Am I really needed? – When I started Lazy Man and Money, I thought it was only me and three or four other sites writing about personal finance… I didn’t even know that the term “personal finance” existed. For the first 3-6 months, I was convinced that I was dispensing knowledge that couldn’t be gained elsewhere. Then I stumbled on the personal finance community and found out that many other people were writing about the same thing. Now when ING Direct changes it’s rates, you have 25 bloggers writing articles about it. Is there really a loss if it goes to 24?

I Will Walk Through The Fire

Given the above, you might be surprised by my decision to move forward and continue writing. I almost convinced myself there… In the end, I’ve come up with a couple of very good reasons to continue writing:

I am unique… as is every personal finance blogger. We each bring our own thoughts and experiences into the mix. The hope is that you find someone you can identify with. It seems that for some subset of you, I’m that person. It would hurt me if you stopped reading about personal finance all together because I stopped writing.
Perhaps I am needed – I’ve noticed that my article about the MonaVie scam is something that some Google search come across. Now I don’t know if MonaVie really is a scam or not (and the comments from both sides were really vocal), but hopefully someone looking into it will find my article and, if they decide it’s right for them, proceed with caution.

Where Do We Go From Here?

Personal finance education has never been more important. Between gas and food prices soaring and the sub-prime mess making credit more costly for the average individual, your wallet is facing one hell of a demon to slay. It’s time to make the tough financial choices… change our destiny. Are you ready to be strong?

Behind this post: Much of this post has been inspired by Buffy Musical – an hour of television so powerful that it’s been running seven years later in movie theaters and sell out across the nation at $10 a pop. It is my favorite piece of writing in any format (book, web, movie, or television) and, quite honestly, nothing else comes close. Other parts of this post were inspired by other episodes of Buffy.