Owning a condo-hotel in Mont-Tremblant offers a unique blend of convenience and challenges. Here’s an in-depth look at the pros and cons associated with this investment:
Pro #1: Completely Turnkey Experience
One of the standout advantages is the turnkey nature of condo-hotel ownership. With the property management handling maintenance, cleaning, and day-to-day responsibilities, owners can enjoy a hassle-free experience, akin to staying in a hotel. However, this convenience usually comes with the trade-off of hefty condo fees.
Pro #2: Excellent Location for Vacationers
The prime location within the resort is a significant pro for individuals seeking a vacation property. Direct access to resort amenities, recreational activities, and the pedestrian village of Mont-Tremblant enhances the overall vacation experience for both owners and potential renters.
Pro #3: Exclusive Owner Benefits
Condo-hotel ownership comes with exclusive perks, such as memberships to the Montagnard Club, access to hotel amenities like lockers, pool, gym, and sometimes parking. With premium hotels like the Fairmont, Westin and Quintescence, comes premium amenities like a spa, valet, and several guest services to take advantage of. These benefits can be particularly appealing to frequent resort visitors, adding value to the overall ownership experience.
Pro #4: Relatively Inexpensive to Purchase
Despite limited appreciation over time, the cost per square foot is usually lower than traditional condominiums of similar quality, making condo-hotel units an accessible investment. For example, a standard hotel suite directly in the pedestrian village can range from $115,000+taxes (420$ / sqft) for a standard suite at the Tour des Voyageurs to $550,000+taxes (+/- 1,100$ / sqft) for a premium suite at the Fairmont Hotel. This affordability can attract buyers looking for a foot in the door at a prestigious resort location.
When units are in the rental pool, the net income usually covers the monthly fees and a portion of the debt service, making the running costs very low. (Watch out for special assessments – see Con # 2)
Con #1: Limited Rental Income Options
A major drawback is the restriction on generating rental income independently. Owners are compelled to rely solely on the hotel for rental arrangements, limiting their ability to maximize returns and exercise control over the rental process.
Con #2: Periodical Renovation Expenses
If the unit is part of the rental pool, owners may face unexpected and expensive periodic renovations. Predicting the timing and cost of these renovations can be challenging, impacting the overall financial planning for the property. Obviously, the more premium the hotel, the more costly the renovations.
Con #3: Minimal Appreciation
Historically, Mont-Tremblant condo-hotel properties have shown minimal appreciation over time. While past performance doesn’t guarantee future trends, this trend suggests that owners may not experience significant value appreciation beyond inflation.
Con #4: Marginal Cash Flow
Despite impressive rental income during peak seasons, the substantial management fees (often close to 50%) and recurring condo fees leave owners with minimal cash flow. This aspect makes it challenging for owners to generate substantial profits from their investment.
Con #5: Difficulty in Mortgage Acquisition
The atypical nature of condo-hotel immovables can deter some lenders. Securing a mortgage may prove challenging, and working with local lenders, such as Caisse Desjardins or local chartered banks, becomes crucial. Collaborating with a knowledgeable realtor can help direct potential buyers to the most suitable lenders for this specific type of property.
In conclusion, potential investors should carefully consider the unique advantages and challenges associated with owning a condo-hotel in Mont-Tremblant, aligning their expectations with the specific nuances of this real estate investment. Low cash flow and low capital gain means these condo-hotels are most appealing to a specific group of buyers: Those who plan on enjoying the perks periodically, place high value on the simplicity of the absolute turnkey experience on the resort.
If you have any questions about buying or selling property at the resort, our team is very well equipped to take on the business.
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