Not your typical holiday home

IF ENJOYING EXOTIC HOLIDAYS AND MAKING MONEY APPEALS TO YOU (AND WHO WOULDN’T IT APPEAL TO?), THEN YOU NEED TO SPEAK TO OFF PLAN PROPERTY ABROAD. MARK TRENT DID AND THIS IS WHAT HE LEARNT… not your typical.

What could be more perfect that owning a luxury vacation home at a landmark resort and receiving rent revenue whenever you ’re not using it? Not much, which is why condo hotels or ‘resort property’ are the newest trend in holiday home ownership. But how do condo hotels differ from owning a traditional holiday apartment or villa? Well, these are not your typical second homes – they are fabulously-furnished suites in some of the most famous resorts around the world. So to find out more, we caught up with Greg Walters, Director of Off Plan Property Abroad and ROC Investments to ask just why this investment trend was becoming so popular.

“For a start, purchasers have to dedicate very little time and effort to managing their investment,� says Greg, “any other buy to let properties require active involvement from the owner in terms of maintenance, service or promotional effort, but owners of properties linked to a hotel operation benefit from all the communication campaigns done by the hotel and their tour operators. All in all, the investors not only make a return, they also benefit from a free five star holiday.�

He continues: “ When owners are not using their property, it is placed into the rental program of the hotel. By capitalising on a hotel’s name recognition, advertising, national affiliations, centralised reservation system and management expertise, unit owners typically receive a higher level of rental income than they would from a traditional holiday home. Plus the hotel takes care of dealing with the renters, as well as all housekeeping and maintenance of the properties. In all this makes ownership hassle free. This is the way forward!�

Serious Luxury
And there’s much to look at in this arena too. Take for example the construction of Bacolet Bay on the Caribbean island of Grenada. Spread over 41-acres of tropical gardens, this exclusive resort and spa is nestled amongst tropical flora with breathtaking views across the Caribbean Sea and rainforest covered mountains. This world class premium resort features a 200-metre white sand beach and secluded bay with hotel facilities that are second to none.

In addition to a multitude of sporting and leisure facilities, Bacolet Bay will also feature a holistic spa created by the renowned designers of the Armani spa in Tokoyo, Dubai and Milan, plus a beachfront wedding chapel, kids’ club, creche and babysitting facilities, a private sheltered jetty and what promise to be some of the islands best restaurants.

Currently there are only a handful of 5-star hotels and resorts on Grenada. Occupancy rates stand at 89% during the peak season, whilst a conservative estimate for future occupancy rates over the year is 65%, plus research by resort consultancy Cushman and Wakefield suggests units at Bacolet Bay should produce rental yields from 11% upwards net of resort management costs with units starting at £310,000.

Remarkably the investment schemes available at Bacolet Bay exclusive to Off Plan Property Abroad clients entails investors paying a 30% initial deposit with no further funds required until completion of the resort in 2010. At completion investors can look to utilise mortgage finance of up to 70% (subject to status) whilst the developer will return the investors’ 30% deposit. The developers will then go on to pay the investors mortgage repayments for the duration of the loan which would leave the property owner with a property free of any finance at the end of the mortgage term.

“Typically owners of Condo Hotel units are entitled to between four and six weeks free personal usage each year and have discounted rates on the use of another hotel suite or hotel room at other times,� says Greg, “And, often for the first two years, rental returns are guaranteed. So both holidays and return are guaranteed!�

Another way…
However, if you don’t fancy the idea of buying a whole apartment, the second option sometimes available is even more accessible to buyers: fractional ownership. A fairly new concept, this can often be mistaken for timeshare but, unlike timeshare the freehold is split into 10 or more equal shares with buyers able to purchase one or more equal fractions. The benefit here being that you can sell your share at any time at the prevailing market value. Another benefit is that, more often than not, there are minimal associated costs to pay such as stamp duty or purchase tax as the developer will engage a company to administer the fractional side of their resort.

On the beautiful Greek island of Samos is a luxury spa resort of Halcyon Hills where there is the option to buy full or fractional ownership. Greece is renowned for prestigious, relaxing holidays in some of the most stunning locations in the world, and Halcyon Hills is being developed in a location second to none on the islands. The development company behind it is working in conjunction with the Greek government to create the resort ensure it is as appealing to the shrewd investor as it is to the lifestyle purchaser, whilst the Greek government itself has implemented initiatives to increase tourism on Samos by 50% and has placed strict planning regulations to ensure that the island is developed for 5-star tourism. The Resort will encompass a wealth of facilities to ensure that every recreational need is catered for, from the 1,200mÇ spa being created by Blue Spa (who currently run the Radisson spa within the Mayfair Hotel, Park Hill) to the 35 birth private marina and, residing on the beach-front, all properties have uninterrupted views out to the ocean.

Interiors, meanwhile, are being created by designers Plumtree Mee who have created interiors at Gidleigh Park hotel in Devon, Abode Hotels and even Michael Caine’s restaurants. Prices for full ownership at Halcyon Hills start from £176,000 up to £735,000, whilst fractional ownership starts from £19,000. This will purchase one-twelth share and include a 7% rental guarantee for the first two-years. Another area that’s enjoying a large amount of interest right now is the Dominican Republic. Year by year the island grows in popularity as a tourist destination, even though it is still far from fully-developed. As a result prices are currently more favourable here than with almost all other Caribbean destinations. Greg tells us that Off Plan Property Abroad see property here as a particularly safe investment, with prices set to rise and rental potential dramatically increasing in line with its ever-growing popularity. To that end, Off Plan are currently marketing the luxury 5-star Las Canas Beach Resort, which is being created directly on a beautiful palm lined white sandy beach on the stunning northern coast just outside Sosua. This area is particularly appealing, boasting fantastic scenery, a picturesque mountain backdrop, and vast leisure and sporting pursuits from golf at the 18 hole Robert Trent Jones Snr course at Playa Dorada (listed as one of the top courses in the world), to some of the best diving, wind surfing and surfing in the Caribbean.

The properties will be fully managed by Oasis Hotels & Resorts (a large Spanish hotel operator) and for the first two years investors receive a guaranteed 10% rental return per annum. All property owners will have full use of the resort facilities including luxury swimming pools, sports facilities, beach restaurant and bar, as well as exclusive health spa set on its own private island within the resort. The resort will also include a Señor Picos Latin Grill and Trader Vic’s restaurant as well as the world famous Trader Vic’s Mai Tai Cocktail Lounge.

There are a range of luxury apartments and villas which all come fully furnished to 5-star standards with stylish, modern simplicity, featuring stone tile floors and hand crafted Caribbean mahogany furniture. All properties include air conditioning, interactive entertainment system including LCD TV, Internet access, stereo, personal in-room safe and telephone.

As well as providing an investment opportunity with the prospect of excellent long term returns, the property will guarantee escape into paradise for four weeks free of charge each year, safe in the knowledge that when you are back home, you investment is working for you. Properties at Las Canas Beach Resort start at £100,000 up to £650,000 (100% finance is available subject to status) and are also eligible for SIPP inclusion (Self Invested Personal Pension), although you cannot use the property.

Go condo
So, who’s buying condo hotels and resort property? The answer, in a nutshell, is everyone, including investors and holiday home buyers who recognise the potential of a revenue-generating holiday home. Many buyers are looking to this type of property purchase to replace pension planning that hasn’t performed over the years and also adds a more exciting way to build a retirement fund, with benefits! It is a hands free solution to buy to let, offering international appeal with buyers to a global market.

“ The developers we are working with look to the Condo Hotel model for their developments and taking a share of future profits rather than simply building property to sell with no ongoing interest. This is a better deal all round for our investors and fits in with our long term strategy to create wealth for our clients through investing in the right resorts and the right money and the right time.� concludes Greg.

So it seems that, whatever your reasoning, for looking at property purchase – be it to enhance your lifestyle and enjoy a luxury hotel holiday or the opportunity to gain high rental returns without having to manage it yourself – it’s definitely something worth considering…