Advantages of the condohotel as an investment in the Dominican Republic

One of the most profitable real estate investments in the Dominican Republic is the acquisition of units in a condohotel or condominium hotel.

Not all types of tourist rentals offer the same profitability, nor do they have the same average occupancy rate, so when carrying out our investment strategy, we must take this factor into account and guide us by the best business model if you are going to buy a apartment or room in a condohotel for sale for rent.

In this post we will explain what is a condohotel and what the benefits of this type of investment can be for those who want to be successful when it comes to do Real Estate in Dominican Republic.

What is a condohotel and why is it such an attractive option for investors?

A condohotel is simply a condominium hotelThe property combines the characteristics of a hotel and a residential condominium, where an investor can have different units in property, from rooms to suites or apartments.

Condohotels are usually associated with a recognized hotel brandwhich is key to its operation and allows you to occupy a more prominent place in the market. The hotel brands, which can be nationally and internationally recognized hotel chains, manage the hotel operations and bring extra quality and prestige to your apartment or room for rent.

In addition, hotel condominiums are generally associated with the advantages offered by their common areas or outdoor facilitieswith all kinds of amenities. Among them, there is the attraction of private beaches, swimming pool, gym, entertainment rooms and sports areas.

What are the benefits of investing in a condohotel in the Dominican Republic?

When you are going to start a tourist rental business, you can simply buy apartments and rent them on popular platforms, or invest in an apartment or room in a condohotel.

These are the benefits of this type of investment.

Prestige brand

Higher price per night

As in any business, brand is a significant asset that can influence profitability and average occupancy rate.

Investing in a unit in a condominium allows you to associate your rental offer with recognized hotel brands such as Hilton, Hard Rock, Marriot, Wyndham or Accor, while on a tourist apartment rental platform you would have a harder time standing out.

The price per night in condohotels is usually higher than in tourist rental platforms, where competition can push prices down.

A Vivantia Homes hotel-branded condohotel can fetch up to US$$150 per night, compared to the average US$$82 that can be obtained for a property of the same characteristics offered as a traditional tourist rental.

Higher average occupancy

4. Lower platform commissions

When we talk about profitability, we must naturally look at other factors, such as the average occupancy rate, since a higher price per night does not necessarily imply higher profits.

However, in the case of investing in a unit in a condo hotel, we can find a higher average occupancy rate of 75% per year, compared to an average occupancy rate of 44%, which is usually found in business models based on tourist rental.

The platforms associated with the rental of units in condominiums have a lower commission than the various tourist rental platforms. This is because the brand has a bargaining power that allows it to offer better conditions to the owners.

For example, you can find commissions of 14% compared to commissions of up to 22% that you can find in some recognized platforms.

5. Direct sales

6. Loyalty programs

Another advantage of investing in condo hotels is that hotel brands offer better sales channels, through the firm's own website, while if you use only.

online vacation rental platforms, you are going to experience increased competition and greater difficulty to stand out in an increasingly saturated market.

Branded condo hotels also offer greater advantages when it comes to customer loyalty, as there are loyalty programs that make it easier for people who have previously stayed in condo units to obtain discounts and benefits so that they can do so again on their next trip.

Brands also manage programs with millions of users, allowing for greater efficiency in sales strategies.

7. Safety of operations

8. Profitability

Another advantage of investing in condo hotels is that hotel brands offer better sales channels, through the firm's own website, while if you use only.

online vacation rental platforms, you are going to experience increased competition and greater difficulty to stand out in an increasingly saturated market.

Whenever we talk about investments in real estate in the Dominican Republic we should not only look at the reduced taxes and advantages for foreign investors. We must also look at what kind of operations can be more profitable.

You must, therefore, bear in mind that in operations of purchase of units in condohotels the profitability is associated with short term rentals, with a price per night, which as we mentioned, can be around $150 USD, but leaving an average net profit of $74/night, and this also taking into account that the occupancy rate is higher.

9. Purchase of the unit in property

10. Low taxation

Unlike other investment models, this type of Real Estate is oriented to the acquisition of units that are part of a condohotel. The unit becomes your property permanently, you can rent it or resell it when it has appreciated in value.

Another of the advantages of acquiring a unit in a condo The hotel is that thanks to Law 158-01 (also known as the Confotur Law), you are exempted from Real Estate Property Tax (1% of the surplus on the taxable estate), as well as from Income Tax and Real Estate Transfer Tax (around 3%), for a period of 15 years, for those who condohoteles located in designated tourist areas.

In short, investing in the real estate business oriented to tourist rentals offers greater advantages through condo hotels than through tourist rentals that are not subject to a brand and cannot be easily differentiated. Vivantia Homes invites you to contact us now to discover opportunities when buying condo hotel units in the Dominican Republic.