I often get requests from second home buyers for a downtown Chicago condo that they can rent out for a week or month when they aren’t using it. Such short term rentals are prohibited by traditional high-rise condo associations. If they allow rentals, it’s typically for a minimum of one year.
The option for such buyers are Chicago’s condo hotels. Buyers can own a room or suite and rent them out for periods as short as one night. There’s also the benefit of the hotel’s services.
The rooms have a condominium form of ownership. Thus, they are part of a condo association and have monthly association fees to cover the common areas and services. They also have property taxes.
One difference from traditional condos is that hotel condos do not qualify for a traditional mortgage. Very few lenders will finance such purchases, so most purchases are for cash.
Since the condos are part of a hotel they include hotel services such as a front desk to handle check-ins and check-outs. The hotel also provides housekeeping services. Keep in mind that these services do have a cost. The proceeds from the condo’s rental will be split with the hotel.
According to Wikipedia, Chicago is one of the most popular locations in the U.S. for condo hotels. I find that surprising given that there are only two condo hotels in Chicago. However, it’s possible that Chicago could get more hotel condos in the future. According to Wall Street Journal Reporter, Kris Hudson, “Developments that combined luxury hotels with pricey condominiums got hammered during the downturn, but now a revival of these projects is under way in a handful of major U.S. cities popular with international buyers.” For the full article see, “A Hotel-Condo Revival“.
CHICAGO CONDO HOTELS
- Trump Tower Chicago – condos for sale include hotel and residential condos
- Raffaello Chicago – all condos for sale are hotel condos
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