The Florida hotels that are selling holiday homes
It's now possible to buy a bolthole in an Art Deco landmark on Miami's South Beach, reports Laura Latham
Wednesday 21 March 2007
The US property market might be on the slide, but in Miami's South Beach, you wouldn't know it. Partly because, whatever the economic climate, this is likely to remain one of the coolest places on the planet. Prices, so the agents say, are holding up healthily, and besides, developers here are embracing the concept of the "aparthotel" more wholeheartedly, perhaps, than anywhere else on earth.
Aparthotels, or "condohotels" as they're known in the States, are a blend of buy-to-let and permanent holiday homes. Still a relatively recent concept, they bridge the gap between private ownership and hotel rooms. The idea is that you buy the room or suite outright but the hotel chain managing the building takes day-to-day charge of it for you, including filling it with guests and paying you a cut of the proceeds.
"The condohotel market is different to other markets," says Brigitte Hunt of Bridgemon International Realty, "it's a commercial as well as a lifestyle property option, good for people who want a holiday home with as little hassle as possible. There's no need to furnish or maintain a suite, as the hotel will do that for you. The hotel will also sort out any problems with the room because if they can't rent it they aren't making money."
Profits from rooms vary depending on the hotel and the rates charged. A 60/40 split in favour of the hotel is common, but Hunt says it can be 50/50. Buyers usually also have to hand over 4 per cent of the rental profit each year to be held in case of necessary repairs. If the money isn't used, it's returned or rolled over.
Most Florida aparthotels are backed by well-known brands, such as Ritz-Carlton, St Regis or Trump and this means buyers not only get high-quality furnishings but access to the best on-site facilities such as pools, spas, restaurants and concierge services, just as the hotel guests do.
Prices vary widely depending on location, quality of building and services. In sought-after Miami Beach you shouldn't expect to buy into somewhere good for less than around £235,000, with the best properties fetching at least double that. Rooms in the swanky Art-Deco gem The Tides on Ocean Drive, a stone's throw from South Beach, are selling from around £500,000. That gets you one of the most famous addresses in one of the most iconic buildings in the area, and a home likely to be visited by stars of the calibre of Mick Jagger and Jennifer Lopez. Such people don't balk at paying £400 or more per night to stay there either.
Also on South Beach and selling at similar prices is the hip W aparthotel, with rooms starting at £390,000 and the new Gansevoort South, sister to the celebrated New York boutique hotel, where rooms cost £442,000 and rent for around £370 per night. The elegant new Viceroy is another building everyone is expecting to sell well, even though prices start at £526,000 for a room measuring just 70sq m.
Look further afield or keep your ears open for early deals, however, and things get considerably cheaper. The highly-rated Italianate Hollywood Grande, right on Hollywood Beach near Miami, for example, is selling from £325,000, a 60 per cent appreciation from when it was launched two years ago. However, a new phase is in the pipeline and, according to Hunt, will start from around £158,000 off-plan.
Popular Florida locations with a bit less celebrity cachet, such as Tampa Bay or St Petersburg, offer properties that rent well and cost from around £110,000 to buy into. And though Orlando may be tarred as a hang-out for the theme-park brigade, there are plenty of families looking for rooms to rent there. You could own a family-size suite for around £100,000 and reap year-round income from it.
Hunt also points out that the Orlando Convention Centre runs events all year and there's a shortage of quality rooms, so buying into a new-build aparthotel nearby is a realistic investment, especially with starting prices hovering around the £100,000 mark.
So what happens when you need a break yourself? Most aparthotel contracts allow you a set number of days at no extra cost, and if your room is being rented during that period, you'll be assigned an available one of the same standard. Average holiday periods are around 45 to 90 days per year, if you don't want to use them, you simply hand them back to the hotel to carry on renting. As Brigitte Hunt says, "It's a win-win situation."
Bridgemon International Realty: 001 954 618 8240; www.bridgemon.com
* In addition to tax on profits you'll need to factor in annual property tax, which varies depending on the property, and monthly maintenance charges of around £200.
* It is illegal for agents in America to sell or advertise aparthotels as an investment product with guaranteed returns.
* If you ask an agent for yield figures they can only give you guide numbers.
* Aparthotels have an edge when selling over standard buy-to-let properties as you will be able to show a statement of income to prove rental returns.
* If you buy an apart-hotel room as a company (which costs around an extra £180) you will be able to offset expenses against tax, such as travel and living costs while you are visiting your property.
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
The West has it totally wrong on Lee Kuan Yew
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
- 1 Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
- 2 Replica Back to the Future Hoverboard released
- 3 Gamers confess the worst things they've done in The Sims
- 4 Dylan Moran on quitting smoking, being about as sexy as the Pope and why comedy panel programmes are 'c*ck shows'
- 5 Modern society encapsulated in five seconds