• The Bayo Condotel Concept caters to real estate investors/buyers who are more interested in doing business rather than using a purchased unit for personal use. A condotel unit owner will receive a quarterly income, 50% of net income generated by the operations regardless of whether the unit was rented or not. Hotel operator will pool together its entire total income from rental operations and distribute this to the Condotel Owners. The owner will also receive free 30 day stay at his/her unit.

What, exactly, is a condotel?

Investment offers vacation lifestyle, chance at recouping cash.

Have you ever dreamed of living in a hotel? Just imagine: You'd have housekeepers, valet drivers, room service and more — all there to cater to your needs. If you lived in a hotel, chances are you'd also have a swimming pool, fitness center, restaurants and maybe even a spa right in your building. What a life!

Or, have you ever dreamed of getting some help with your bills? Just imagine: Every time you left your house for a night or more, someone else would stay there, clean up after themselves and then pay for the use of your property. You'd never have to do anything, you'd never know someone had been there, and you'd make some extra cash. What a deal!

Well, some developers and hotel companies are trying to make these dreams a reality for those looking to purchase real estate. The result is a new breed of property called a "condotel," a cross between a condo and a hotel. But how exactly do condotels work, and what benefits do they offer owners?

What are condotels? First let me explain what condotels are not. They are not timeshares. With many timeshares, buyers purchase the ability to stay at a resort for a certain amount of time at certain times of the year. Buyers are, in essence, paying for their vacation stays in advance. With a condotel property, buyers are actually purchasing a piece of real estate. Depending on the property, they might be buying a hotel room, or a studio-style room, or a three-bedroom condo or a "villa" — there are many different floor plans available and they go by a variety of names. (Villas and other free-standing residences are often called "fractionals," but to keep things simple, I'll use the term "condotel.") The bottom line is that condotel buyers own a real piece of property — one they can live in or rent out, as they please.

How did the condotel concept begin? Building a residential condominium building or a new hotel is an expensive undertaking these days, especially in markets where land is at a premium. So developers thought, "How can we get someone to share the costs of this expensive project during the construction stage?" The answer, they realized, was to pre-sell the units as condominiums. Then, to sweeten the deal for investors, developers would bring in a property management company to run the building like a hotel, so that owners could rent out their units when they weren't using them and possibly receive some sort of return on their investment.

So how does it work? Buyers who purchase a property at a condotel can, of course, use this property as their main residence, although certain local laws may restrict owners from staying there 365 nights a year. When in residence, owners have full use of all amenities offered at the hotel. They simply pay extra maintenance fees (similar to homeowners' association fees) for the upkeep of the common areas.
Owners may also choose to place their unit in the hotel's rental program. This option allows the unit to be rented at market rates to transient guests, thus bringing the owners some income from their property. Owners pay the management company a certain percentage of rental revenue in exchange for booking the room, providing housekeeping services, etc.; management fees generally range from around 20 percent to 40 percent of the nightly rate.

What should buyers look out for? One should never go into any real estate transaction unprepared and uninformed. While I can't list everything you should think about when considering buying a condotel unit, here are some highlights.

This is not easy money. At least, not necessarily. Can the money you get from renting out your unit pay for your total investment and maybe even net you some extra profits? Sure it could. But it could just as easily never pay for itself. Real estate markets can crash, and hotel rental and occupancy rates can fluctuate wildly. If making rental income is very important to you, research the local tourism market carefully. And if any sales agent suggests any type of return on your investment, or guarantees that your condotel will be a moneymaker, run the other way. For them to do so is illegal, so they are either poorly trained or dishonest. Either way, you should look elsewhere.
Choose a management company you trust. If you are going to rent your unit or be away from it for a while, someone will have to manage it for you. Most likely, the management company you choose will be the same company that owns and manages the building itself. But in most cases you can hire an outside company to manage your condotel property if you like. The important thing is that you trust and enjoy doing business with the company you choose. Again, I'll use Morgans as an example. I have been a guest at many Morgan properties, I enjoy their service, and I trust the quality of their products. Therefore, I would feel very comfortable having them manage my property when I wasn't there. Make sure you feel the same level of comfort with your property manager.
Read all the fine print and understand all the details. I can't stress enough how complicated purchasing a condotel can be. This is not like buying a single-family home on a suburban street. There's a lot to find out: how much will maintenance fees be, can you take a homestead exemption on your property, can you decorate your unit to your liking or do rental restrictions prevent personalization, what percentage of rental revenue does the property management company take, etc. Anyone interested in entering this market must do lots of research before even beginning to look, and must ask lots of questions every step of the way.

Condotel ownership can be a great way for people to enjoy the benefits of living in a vacation setting. It is an interesting concept for smart buyers, and I can't wait to see how the trend grows over the next few years.

BAYO CONDOTEL & SUITES BENEFITS:

(FOR CONDOTEL UNIT BUYERS ONLY)

At Bayo Condotel you own a specific Condotel Unit and have Condominium Certificate of Title in your name once it is fully paid.
Bayo Condotel Owner will get a 30-day FREE stay benefit commences at the start of every fiscal year. This will be distributed to the Unit Owner in terms of certificates where they are entitled to priority in booking even on peak seasons provided the availing of the 30-day FREE stay is exercised and availed of by negotiating in advance the use of the unit.
Bayo Condotel Owner may use his 30-day FREE stay for more than one unit at the same duration, provided that it would be the same unit type. For example, if an owner will stay in the condotel for a week and he will rent another unit for his family or friend, he will consume a total of 14 days for the week chargeable to his 30-day FREE stay.
If the usage will exceed 30 days, they will have to pay the member’s rate which is 30% discount from the regular rate.
If the Condotel Owner was not able to use the 30-day FREE stay benefit. Subject to 2 months prior notice before expiry, the unused 30-day FREE stay maybe transfer/authorized his friends or relatives to use it. Advance booking and registration is required subject to the availability of room units.
While the condotel is under construction, Buyers who have paid the units and have a with 30-day FREE benefits may avail it at Sir William’s Hotel located at No. 39 Timog Avenue, South Triangle, Quezon City on a pro-rata basis as follows: a. 100% payment – 30 days free b. 50% payment – 15 days free c. 30% payment – 7 days free d. 20% payment – 5 days free
If the Condotel Owner does not use his FREE stays on peak season, he will receive a bonus on those days equivalent to room rate difference on regular days.
Bayo Condotel Owner can upgrade his FREE stay to different Unit category, provided that he has to pay the difference in room rates.
Bayo Condotel Owner will receive an income from the Hotel operation.
In order to maximize returns and ensure cost efficiency for Condotel Owner, only room revenues and room divisions related expenses are considered in the determination of income such as housekeeping, laundry, front office, security, repairs and maintenance, utility, taxes and insurance attributable only to the units. Food and Beverages (F&B) and its related expenses as F&B personnel, kitchen equipment, supplies, utilities, taxes and insurance are treated separately from and independent of the room divisions expenses of each Condotel units. This setup assures the Condotel Owners a cost efficient operation as room related expenses are easily controlled and managed.
Dividends shall be payable quarterly in checks to be mailed or paid directly to the bank accounts of Condotel Owners.
Bayo Condotel Owners will still receive quarterly income based on the type of unit regardless of whether the unit was rented or not. Hotel operator will pool together its entire total income from rental operations and distribute this to the Condotel Owners as dividends according to the pro-rata percentage sharing on unit types. Income will come from room revenue less room division expenses.
BayoCondotel Owners can not live in their property full time. Condotel is for Investors Only. Condotel Owners are required to enroll in the Condotel Operations for a minimum of ten (10) years with further option available to the operator which he is likely to invoke to extend the term on expiry subject to mutual agreement as per majority vote of the Unit Owners Association.
Sir William’s Hotel will be the Hotel Operator to manage the Condotel and to provide financial, operational and property management of the Condotel Units.
Hotel Operator will receive 50% shares on the gross income of the Condotel.
As a premium responsibility to the Hotel Operator, if total expenses do not exceed 30% of net sales, which shall result in a 50% gross operating profit before income tax, an additional 3% of net income will be given as a bonus to the Hotel Operator.
Minor and major repairs are shouldered by the Hotel Operator and chargeable to and part of the operating cost covered in the estimated 50% Hotel Operator’s share.
All “Bayo Condotel & Suits” Unit Owners are automatically members of the Condominium Association and pay association dues but for Condotel Owners, Condominium Association Dues are charge to the Hotel Operator and part of the operating cost covered in the estimated 50% Hotel Operator’s Share.
The Condotel Owners will pay their INSURANCE PREMIUM share to the Condominium Association.
Upon operation of the Condotel, investors will receive percentage of income.

Condotel Income Projection

INVESTMENT COMPUTATION
1 BR Condotel Unit
Unit Area: 28.54 sqm

Total Investment Value:	Php. 1,653,298.32
Less: Reservation Fee:	20,000.00
24 Monthly Investments:	23,023.74
Furnishing for 12 months	20,159.17
80% Balance thru bank financing (indicative rate):
5 years @ 10.25%:	29,088.28
10 years @ 11.00%:	18,595.69
15 years @ 11.50%:	15,450.93