Condotel – Luxury resort model combining lucrative investment to bring dual value to investors. In the Vietnamese market, this type of apartment is in the high-end segment, suitable for the middle class with modern amenities. So what are the characteristics of Condotel? Opportunities and challenges when investing in Condotel? Let’s find out more in the following article.
Features of Condotel in Vietnam
The position determines the profitability of Condotel
Condotel is concentrated in the coastal cities such as Da Nang, Phu Quoc, Nha Trang, etc. It can be seen that this type often occurs in places where tourism activities are thriving. Attractive position, leading to rapid growth services opens up many opportunities when building Condotel.
When choosing Condotel, customers prioritize the top position factor. The closer to the sea, the closer to the modern facilities, the more visitors will be attracted.
Condotel is located in the high-end real estate segment
Large project scale, high-end segment is one of the characteristics of Condotel. Large operating costs, large numbers from a few hundred to several thousand apartments. Besides modern architecture, luxurious design must also come with many utilities and services. At this time, new cash flow is guaranteed, effective business and bring about profits as committed.
Owned by an individual
Condotel is operated and maintained by a professional unit. To share the difficulties in the construction process, the investor will resell to individuals in the form of Timeshare. Each apartment is owned by a person and can be freely used.
Investors buy Condotel and lease it back to make a profit. At the same time, use this as your “second home” when in need of vacation.
Opportunities and challenges when investing in Condotel
The high number of tourists opens up many investment opportunities
In 2017, Vietnam has 12.9 million international visitors to travel by air, an increase of 32% compared to 2016. Of which, more than 9 million visitors from China, European visitors accounted for 2 million and other markets increase from 11 – 25%.
In addition, domestic visitors reached 73 million, revenue reached 510,000 billion and made our country become the highest tourism growth in Asia, ranking 6th in the international market. With the above figures, it can be seen that the tourism industry in Vietnam is making positive progress. Following that are factors for investment to become more effective and developed.
Investing in Condotel is an attractive long-term step
Condotel is not suitable for those who want to invest in surfing. Owning many outstanding advantages such as benefiting from the company’s brand management, stability and attractive interest rates. Condotel is committed to bringing high and long-term profit to investors
Condotel difficult to resell
Individuals who buy Condotel can both resort and re-rent to get the word. However, due to specific products, they cannot be resold. Especially in case the management company fails to operate effectively, the profit margins will lessen the value of this type of property. Not only that, the number of Condotel is increasing, the pressure on competition is also the cause of falling prices of apartments.
The legal provisions are not yet clear, causing investors to wonder
The law still does not have specific regulations on hotel apartments. In the Tourism Law, only tourist apartments are mentioned. But not qualified to decide on issues in resort real estate business. Therefore, this gap makes investors dare not risk to invest in Condotel.
Easy to risk with incompetent management units
With attractive profit, from 10 – 15% / year creates great attraction for investors. Reasonable apartment prices, high liquidity make many people pour money into. However, for non-professional and reputable management units, it is very easy to face risks. Even bankruptcy and not recovering the original capital.
Moreover, through the trust, financial model is not transparent. Investors are not assured of their benefits. When the Condotel is poorly operated, its management is not strict, the person who suffers loss will be the owner.
Therefore, investors need to select reputable units, have a firm foothold in the market if they want to create stable and long-term money from Condotel. With the characteristics of Condotel that we mentioned, hope readers will better understand this type of tourism.