I own a couple and even developed a project that we turned into a Condo Hotel.
In my experience it only makes sense to do it if the rent per night is at the same or less than a competing hotel. Also the building needs to have amenities otherwise people wont stay there. Makes sense that people would pay more than for their own condo instead of a hotel room, but they won't. In the end if the condo isnt cheaper or the same price people will not rent it.
Also you really have to do your due diligence on the developer and management of the building. There is a lot more involved in nightly rentals than regular leasing to tenants... You have to have a walk through after every check out. Have to go through the inventory of the your dishes, cutlery etc... All the towels and bedding need to be washed. You cannot have any stains what so ever on the linens.
You have to have someone at the building during all hours of the night, just in case shit goes down or you have late check-ins. Because of all this the management fees are higher than regular rental managers. I pay 15% of my rent to the management company compare to the 8% i pay now for a guy to look after my calgary condo's.
If you go forward with it make sure you find a developer who has done this before and uses a solid rental company. When builders get into trouble and the place isn't selling and they need cash some will make a pitch for fractional ownership and try to turn the building into a condo/hotel. I know because some partners and I bought a bankrupt developer who tried doing the same thing to save his ass. Needless to say it didn't work out for him and we picked up the project for next to nothing.
In my experience it only makes sense to do it if the rent per night is at the same or less than a competing hotel. Also the building needs to have amenities otherwise people wont stay there. Makes sense that people would pay more than for their own condo instead of a hotel room, but they won't. In the end if the condo isnt cheaper or the same price people will not rent it.
Also you really have to do your due diligence on the developer and management of the building. There is a lot more involved in nightly rentals than regular leasing to tenants... You have to have a walk through after every check out. Have to go through the inventory of the your dishes, cutlery etc... All the towels and bedding need to be washed. You cannot have any stains what so ever on the linens.
You have to have someone at the building during all hours of the night, just in case shit goes down or you have late check-ins. Because of all this the management fees are higher than regular rental managers. I pay 15% of my rent to the management company compare to the 8% i pay now for a guy to look after my calgary condo's.
If you go forward with it make sure you find a developer who has done this before and uses a solid rental company. When builders get into trouble and the place isn't selling and they need cash some will make a pitch for fractional ownership and try to turn the building into a condo/hotel. I know because some partners and I bought a bankrupt developer who tried doing the same thing to save his ass. Needless to say it didn't work out for him and we picked up the project for next to nothing.
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Canada, where the women wear pants and the men wear skinny jeans