A Condotel Sales Success Story in South Florida
Let’s start with the facts: A recent Florida home loan purchase of a condotel in Sunny Isles Beach netted a couple a profit of over $100,000. This formally sleepy town with two and one-half miles of beach is now referred to as the new “Millionaires Row” because of its newly built luxury buildings. It’s located midway between downtown Miami and Fort Lauderdale in South Florida.
Date of Purchase: Summer 2004 for $285,000
Date of Sell: January 2006 for $395,000
Now, about that property: The fully furnished 550-square-foot condo is one of 390 rooms - 18 per floor - in the building. Residents have access to the resort’s amenities, including the pool and bar.
The home sellers: Two years ago, Florida home loan broker Sebastian Tettamanti and his wife, Maria were seeking an occasional weekend getaway from their Miami home. They wanted something small and on the beach, but it had to be affordable and nearby so they could use it frequently.
They looked at several condo possibilities before they discovered the condo-hotel concept offered by the Trump International Sonesta Beach Resort.
“A lot of the condo buildings have restrictions as to how many times you can rent it [to others],” Mr. Tettamanti says. “But with [the Trump resort], I can register it with the hotel’s rental program when I am not there.”
When friends and family started tagging along on vacations, the pair decided it was time to sell and move to a bigger place. With the help of a Florida real estate agent, the couple sold the condo and profited big time.
Inside the Transaction: They couple used a Florida mortgage loan to purchase the unit, pre-construction, for $285,000 in summer 2004, moved in at the start of 2005 and sold it for $395,000 in January 2006. That’s a profit of $110,000, not considering financing, maintenance fees or their 50% share of the $200 to $300 a night that hotel guests paid to stay in the unit.
The Bottom Line: “When we found out the appreciation of the condo hotel, we decided to upgrade [to a bigger unit] even though we did not buy the condominium unit as an investment,” Mr. Tettamanti says. The condo reaped a 39% appreciation rate, compared to 21% average for condos in Sunny Isles Beach.
See? Even those not looking to make a large profit through their Florida home loans have potential to strike in big in the South Florida housing market.
