For those of you who like to invest in property, there is now another alternative option to invest, namely condotel. The term which stands for condo hotel is not often mentioned, but this type of property is often said to be one of the tempting new property investment options.
The shape of the condotel is the same as apartment units or condominiums in vertical buildings. However, this type of property has complete facilities like a hotel. Because of the merger of these two concepts, the term condotel is embedded as the name of this type of property.
Just like an apartment unit, you will feel at home while staying at this condotel. In each unit, there is a living room, room, to the kitchen. You will feel comfortable living in your own home. But in terms of facilities, of course owned condotel far above ordinary apartments. Here you can find a swimming pool, fitness center, spa, to meeting room. All these facilities make everyone who stays at the condotel will feel at home and reluctant to go home. These facilities are designed to provide extra comfort for visitors to this property.
Why are people who stay at condotels referred to as visitors, not owners? This is because condotel is not intended as a place to live. Basically, condotels are rooms like apartment units purchased by investors to be businessed or invested in. The units in the condotel will later be operated by the hotel manager for rent to visitors who come. Therefore, the convenience of condotel is very preferred so that visitors feel at home and want to stay again and again in the condotel.
People who decide to buy condotel usually have two options for profit, namely resold or businessed directly. Businessed directly here means that your condotel unit will be managed by professional hotel management to rent to third parties to make a profit. Meanwhile, many people choose to sell their condotel units some time after being purchased to get the difference in price that has gone up. Here's an overview of the two options.
1. Resale
Parties who invest their money into condotels for resale usually buy condotels early or when this vertically shaped property is still not completed. By buying early, you will get a more oblique price than buying a unit when the condotel has been established.
People who buy condotels at the beginning of this construction will later sell it once the condotel is completed. This is because the price of a new condotel has a high value, especially if the place is strategic and is in the center of the business. There are also those who hold it back some time in search of greater profits. But at any time of sale, the value of condotel units will tend to rise following inflation. Buying a condotel when the building is not yet standing does not mean without risk. Condotel buildings that are so large and towering certainly take a long time in the works. In the period of time until the building is completed, you will find it difficult to resell it. You have to wait until the condotel work is completed to make a profit from the investment plan.
When deciding to buy condotel, you should be observant to see market conditions. Wrong if you are not careful and choose to sell it when market conditions are bad, the value you can get is not in accordance with the expected loss. After all, the profit that can be gained comes from the increase in the price of the unit you have. So, when market conditions are good and the value of condotel units becomes soaring and up to expected, sell the unit to prevent any turmoil back in market conditions that causes your condotel value to plummet.
2. Rented
The second option you can make in condotel investment is to hand over the operating units you have to the hotel management that manages the condotel. Hotel management will rent out your unit to a third party. From there, you can get rental benefits.
There are two schemes that can be used in the condotel unit rental business that you have, namely a guarantee scheme or revenue sharing. If you choose a guarantee scheme, usually the condotel hotel management will provide a return on investment (ROI) which is about 8-12 percent. This percentage is certainly much more profitable than you deposit liquid funds in the bank. So if you have a condotel unit in the Jakarta area that is worth Rp8 billion and decide to make it a rental business managed by management with 10 percent interest per year, then you can get Rp800 million every year.
Divided by 12 months, each month you can pocket a profit of Rp66.7 million. Of course, that number will be cut by taxes. However, that does not mean this scheme does not cause losses for you. The guarantee scheme has a certain period of time that makes the value of your property decrease every time the agreement expires. If the example above is a guarantee scheme for three years, when the period runs out and you want to guarantee it again, the value will be less than before.
Meanwhile, the second scheme is revenue sharing. Here you will not get a definite profit every month because the funds that will be obtained are adjusted to the rental value that occurs in that month. When the rent is a lot, your profits will be large. Conversely, if your condotel unit is quietly visited, the revenue sharing funds obtained from the manager are dwindling. In general, the revenue sharing comparison for condotel unit rentals between owners and tenants ranges from 50:50 or 60:40. This number looks fair and tempting. But you have to remember, on profit sharing schemes, which are divided not just the profits earned. The costs incurred in the maintenance of the unit will also be partly charged to you.
The two schemes have their own benefits. However, another advantage that you can get from the ownership of condotel units is a free stay. As an owner, you can spend the night in your unit without having to pay anymore. However, there is still a need to make a reservation and can occupy it when the unit is empty rental. Time is limited, which ranges from 12-30 days a year.
Both condotel investment plans can generate considerable profits for you. However, you should also pay close attention to the things that can make you lose. However, when choosing a condotel, the points below should be considered so that your profit is maximum and prevent losses to a minimum.
Important Points
Then, after knowing how this condotel brings benefits to you, it's time to know what to consider when you are about to start investing in this field. Here are the key points.
a. Location
This point is absolutely considered whatever your decision in running an investment in the condotel unit you want to buy. A strategic location will make your condotel investment grow rapidly. If you want to sell for a certain period of time, the value grows quickly. Want to rent it will be easy because the location is easy to reach and close to crowded places.
On the other hand, the mistake of choosing a condotel location can make you lose money. A location that is not strategic makes the selling value of your unit difficult to increase. When you want to run the concept of a rental business for your condotel, the management will be difficult to market it and your unit becomes empty of visitors. Of course this will reduce the value of the guarantee and income you get from the condotel unit revenue sharing scheme.
b. Reasonable Price
You should not be greedy when setting the selling price or rental price of the condotel unit you have. Wrongly, if the price is unnatural, buyers are reluctant to glance at the condotel even though it is strategically located. Prospective visitors can also step back and choose to stay at another condotel if the rental price is too high.
Put a reasonable selling price or rental price. If you want to sell, pay attention to market conditions and inflation that is happening, then adjust the price. But if you want to rent it, it does not mean you give a very low price so that many visitors are interested in your unit. Keep in mind, the ownership period of condotel is only 20 years. Before that period of time, of course you must have been able to return capital to get a decent profit. How to calculate an easy rental price is to divide the purchase price by 1,000. So if you buy a condotel unit at a price of Rp2 billion, you can rent it out for Rp2 million.
c. Legality
Whatever your investment, a black over white agreement is indispensable. Similarly, you must be considered when you decide to buy a condotel unit. Don't just be tempted by promotions from developers. Make sure the land, buildings, until the condotel establishment permits are legal.
Do not let you be fooled into buying illegal units that will cause legal problems going forward. A legal condotel will make it easy for you to resell it. Meanwhile, the status of condotel and illegal agreements only makes it difficult for you to achieve investment returns that are expected to provide large profits.
d. Reputation
It's not the intention to underestimate developers or new managers, it's just that everyone will prefer developers and managers who have been trusted. Reputation is indispensable in this condotel business. Condotel buyers or visitors also often make the reputation of developers and managers in consideration of their decisions. The image of the developer and manager is also important to ensure that the funds you invest will be safe. With a bad reputation, developers and managers can abuse your money that is not small.
e. Audited
Another consideration in buying condotel units is to ensure the management of the property has been properly audited. condotel whose audit clearly makes investors feel more secure in pouring funds. Check whether the audit is distributed to all investors or not. Of course, all investors have the right to know about the condition of the condotel they have.
Also make sure the condotel you have is audited by a trusted public accountant. The credibility of accountants who conduct audits can also be considered by investors in investing.
Anticipated Asmtic Loss As Possible
Every investment is clearly expected to provide many benefits. However, you should also anticipate the possible risks that may arise in the ownership of this property. But for sure, just like investments in other forms of property, condotel units are very promising to get high profits.
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