Is Investing In A Condotel A Good Idea?

Sibukaw Resort Residences

Are you the type of person who wants to own property but cannot seem to stay in that place for the whole year?  Do you dislike the idea of having to look for available rooms in the place you want to spend your summer? If the answer to these two questions is yes, I guess it’s time for you to look into the idea of investing in a condotel.

According to investopedia.com a condotel is a “condominium project that is operated as a hotel with a registration desk, cleaning service and more.” The term condotel is actually a combination of two words: “condominium” and “hotel” hence the term “condotel.”  In other words it is a condominium unit that can be used as a hotel. Each unit in a condotel is owned by an individual and owners have the option to include their units “in the hotel rental program where it is rented like any other hotel room.”

Sibukaw Resort Residences

Here in the Philippines, owners of condotel units can stay in their units for thirty days each year. They can stagger their stay or they can opt to stay for a week in one month, and another week in another month. However, just like any other hotel, they should make a reservation for their won units. But they do not have to pay for it since they are the owners of the unit. 

The unit is made available for other guests for the rest of the year. This means, unit owners can actually earn while they are not using their units.  Units are typically the second or third homes of the owners, or they do not normally stay in their units for a good part of the year.

Sibukaw Resort Residences

There are some advantages and disadvantages in investing in a condotel. One major advantage is it can serve as a remarkable vacation home. This is especially true if the condotel is located in a tourist area. Unit owners can stay in their units without having to pay the high cost of a hotel room.  Another advantage is the rental revenue of the unit can actually offset the amortization of the unit. For instance, if the rate of the room is around P4,000 per night and it is occupied for a good part of the year, then the cost of amortization can actually be covered by the rental of the room by other guests. Unit owners will not have to deal with landlords since the management of the hotel will ensure that the room us well-maintained.  It can also be a source of pride for the unit owners since they can say they are part owners of the hotel. The condotel also has potential for capital appreciation or its value can actually increase as years go by if it is well-maintained.

Sibukaw Resort Residences

On the other hand, there are also some disadvantages in investing in a condotel. One major disadvantage is the need to make a reservation before the unit owner can stay in the room. Since it is operated as a hotel, unit owners will still have to make a reservation, which can be difficult during peak seasons (but they can actually make their reservations way ahead of time). Another disadvantage is the condotel is affected by dips in the market. This is one good reason why investors should consider all options before they start investing in a condotel. They should check the location whether it is a good place for tourists to stay in and whether it is a high tourist area.  However, it is also important to note that the revenues of the condotel are split up equally among all unit owners. This means all unit owners can expect something in return whenever there are guests in the hotel even if no one is staying in their units.

These are just some of the things to consider before you think about investing in a condotel.  A number of condotels have actually been set up in numerous tourist destinations in the country. And it is possible for the return on investment to be attained in less than a decade, depending on the occupancy rate of the hotel.

So you want to ensure that you have somewhere to stay in the place you would like to spend your vacation in, it may be a good idea for you to consider investing in acondotel, especially in areas that tourists normally spend their vacations.

Investing In Residential Lots In Cebu

Monte de Piedra

Investing in residential lots or house and lot in Cebu? This is one question that a number of people are asking when they think about investing in Cebu. For people who have no problem with their budget, this question is a no-brainer. They would definitely go for a house and lot. In fact, they may even buy it outright to take advantage of the discounts available for spot cash payments.

However, for many of us who may not have the budget to buy a house and lot, we may have to settle for a residential lot. This is actually the most practical thing to do. There are a number of developers offering residential lots at a reasonable price. I am using the term “reasonable” since you cannot get cheap residential lots in and around Cebu City. If you want to buy cheap residential lots, you would have to take a long ride away from the city.

The reasonably-priced residential lots I am referring to are located just outside the city. And it would be better to buy these lots when they are still being developed since their prices would be lower compared to lots in subdivisions that are already developed. For instance, I know of one development just north of Cebu City where residential lots were priced at around 1,800.00 per square meter when they were initially offered in the market.  However, after around a month, the price went up to P 2,500.00 per square meter before increasing to P 3,200.00 per square meter. I think the current price tag of this residential lot is already at P 4,000.00 per square meter. To think, these residential lots were only offered in the market last November. In a matter of seven months, the value of the residential lot increased by over 100 percent, which makes it practical to think about investing in residential lots in Cebu.

Monte de Piedra

Real estate is always a good investment since the value of real estate would, more often than not, increase as time passes. The only time it may decrease if there is a war, natural disaster or any other event resulting to the death of thousands. This may be the only time when land prices will decline. However, it will not stay down for long since they are expected to increase once the place is able to recover.

I remember a story my grandfather told me a long time ago. He was one of the survivors of the Bataan Death March. He said when they were released from the military prison after the Death March, he and his fellow-survivors were offered a piece of land somewhere in Manila. The area was actually a marshland at that time, and was offered at a few centavos per square meter (I don’t know if the price was accurate but I think this is possible since the country was in the middle of a war at this time). However, since he already missed his family, he hesitated and in the end did not purchase a single plot of land in the area.  That marshland offered to my grandfather over seventy years ago is now the city of Makati.

This just shows that even after a war, once an area is developed again, its value will increase exponentially, albeit it may take a number of years depending on how fast the development is made.  This is another reason why you should take into account investing in residential lots in Cebu.

Elizabeth View Homes

The price of land in Cebu City has increased so much in recent years that it is not possible for you to find residential lots within Cebu City priced at less than P 10,000.00 per square meter. In fact, this price is also true to a number of areas in the outskirts of the city. Although it is still possible to find residential lots priced lower than P 5,000.00 per square meter in the outskirts of the city, it is important for you to buy these residential lots while they are still being developed. The moment, the areas around these residential lots are developed, the price will definitely increase. This makes it important to think about investing in residential lots in Cebu as soon as possible.

There are also some residential lots available for purchase without any interest for a five-year payment period. This means, you can actually own a piece of land by paying the same monthly amount for the next five years. Since the price of land increases as more development comes into the area or as time passes by, the earlier you buy the residential lot, the bigger would be the value of your investment after a period of time. For example, if you are going to buy the lot at a current price of P 3,000.00 or P 4,000.00 per square meter today, it may go up to P 5,000.00 or even P 7,000.00 per square meter after a few months or years. In fact, it is also possible that by the time you are able to fully pay the residential lot, its value may have doubled or tripled already. This means, you have doubled your investment within a five year period, which you cannot get from a time deposit from any bank.

Elizabeth View Homes

By the time the residential lot is fully paid, the area would already be developed, which makes it easier for you to sell it at a huge profit.  Or you can opt to build your house on your new residential lot.

Investing in residential lots in Cebu is actually a practical thing to do since Cebu City may become the next Makati. This means land values around Cebu City will skyrocket once this happens. If I had the cash, I would definitely think about investing in residential lots in Cebu since I know that in five years, the area will be developed and the value of the lot that I bought would increase by at least fifty percent, if not, by one hundred percent.